Wednesday, April 25, 2012

Attacking Main Street

I was talking to my banker the other day. He mentioned that I would be required to have my commercial property reappraised in a few years, per the requirements of the Dodd-Frank bill that passed a few years back. A bit if background. I have been paying towards my mortgage for several years now without missing a payment. Also, we borrowed a substantial amount from the bank to build two new apartments above my retail store. Everything is going just fine with respect to us meeting our financial obligations with our building. We are even paying an additional amount every month towards our mortgage. The relationship with our bank is just fine. And yet.... we will soon be forced to pay about $2500 for a reappraisal, unless the DF bill is amended. The reason I assume is that the DF bill apparently seeks to have a more accurate assessment of a banks loan portfolio, presumably to head off excessive risk taking by banks. Fine, I get that but... why not just let stupid banks fail instead? Bank deposits up to a certain point are already insured. A successful bank would come on in and buy up the assets of the failed bank. Perhaps it is not so easy as all that. But there are some that think government regulations are all good with no adverse side effects. Baloney. There is a trade-off always. In this case, property appraisers hit the jack pot while property owners have to pay, essentially, a Dodd-Frank tax of $2,500, for a reappraisal not in my interest or my banks. I suppose there are those that applaud DF as a slap at the big Wall Street power brokers. But the pain will be inflicted on me, a small business owner at 416 Main Street.


Denis Navratil said...

Sorry readers. My blog host changed its format and decided not to let me have more than one paragraph. I will try to figure that out for future postings.

Testing, testing.

GearHead said...

Dodd-Frank should be repealed. An onerous regulatory over-reach that slams small businessmen nation wide. A government fix to a government-created problem which is destined to create more problems than it solves. I used to be able to purchase a building without an appraisal as long as it was otherwise understood there was plenty of equity to cover the lender. Not any more. It is truly an ugly exercise. And to what point? Making it harder to get and keep a loan is eroding the free markets ability to transact business. We all lose, of course.

Anonymous said...

DF aside, why would you not want an accurate value for your property?

Maybe your value will go down, and result in lower property taxes.

Maybe your value will go up and you will just pay your fair-share.

Anonymous said...

Maybe monkeys will fly out of your butt. Please take photos.

What is the value of a property? It is the price the market will pay, right? No, it is what people like Dickert say it is. Pay, rinse, repeat.

Denis Navratil said...

Anon 6:09, property values fluctuate and I have no need at the present time to know the semi-precise value, nor does my bank. As such, it would be money spent needlessly. But, your assertion that it would affect my property taxes either up or down is entirely mistaken. The city would not take into account my property valuation as they do their own assessing. I suppose I could use an assessment in a lawsuit against the city as many large corporations have done around town, but my pockets aren't that deep.