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Thread summary:

Crystal Coast Homes & Properties, coastal North Carolina, sold inventory, inventory decline, active inventory, US mortgage market, Fannie and Freddie Mac, mortgage metrics, conservative loan programs

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Old 11-09-2008, 06:03 AM
 
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Originally Posted by Bill Hitchcock View Post
But I do want to bring something back up-be careful of "universal yardsticks" when trying to determine value and if something is a good deal or not.

Let me give you an example. I produce a nightly television program called Crystal Coast Real Estate Television" We interviewd the head of the county tax assessors office for the show and explained how they determine value.
In a nutshell-They lay a grid over the county with over 700 little squares. All properties within a little square are given the same value. In esscence-All square footages for all homes within a particular square would be given the same dollar value.
Big mistake here because a 30 year old mobile home could be beside a multi-million dollar home.

So please-Be careful of any universal yardstick when it comes to real estate.
I think the tax value has some limited use, especially when you're making comparisons in the neighborhood, and also when the asking price is significantly higher or lower.

If the seller wants $200k, and the house says $110k in tax value, I treat that as a red flag to check the area out more thoroughly, or that maybe the house is a flipper with nothing but fancy kitchens and bathrooms. If the seller wants $150k, and the tax value is $275k, then that tells me the house might be in bad shape, like water damage, or that I should be looking for anything that looks 'too good to be true'.

The most important yardstick, though, is a comparison of what I can rent for that price. There's definitely a premium to pay for owning.
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Old 11-09-2008, 12:20 PM
 
Location: Up above the world so high!
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Quote:
Originally Posted by rubber_factory View Post
I think the tax value has some limited use, especially when you're making comparisons in the neighborhood, and also when the asking price is significantly higher or lower.

If the seller wants $200k, and the house says $110k in tax value, I treat that as a red flag to check the area out more thoroughly, or that maybe the house is a flipper with nothing but fancy kitchens and bathrooms. If the seller wants $150k, and the tax value is $275k, then that tells me the house might be in bad shape, like water damage, or that I should be looking for anything that looks 'too good to be true'.

The most important yardstick, though, is a comparison of what I can rent for that price. There's definitely a premium to pay for owning.
Rubber, not to be disagreeable, but truly the tax value of a home has little to do with it's current market value. And it is often better to buy an older home whose tax value is much lower than the sales price because then as a new owner you pay far less in taxes than you would on a comparable new home. And as the longtime homeowner, I do NOT want my taxes to have grown at the rate my equity has!
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Old 11-10-2008, 05:21 AM
 
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Originally Posted by lovesMountains View Post
Rubber, not to be disagreeable, but truly the tax value of a home has little to do with it's current market value. And it is often better to buy an older home whose tax value is much lower than the sales price because then as a new owner you pay far less in taxes than you would on a comparable new home. And as the longtime homeowner, I do NOT want my taxes to have grown at the rate my equity has!
Right, a lower tax value definitely is a direct benefit.

But as far as using tax values for purposes of determining market price, I don't think it is completely worthless. It is helpful as an apples-to-apples comparison, even if it doesn't tell you anything about the market, or much about the house's current condition.

You also must consider that there are about 200 or 300 eligible homes for me to sort through. When you're trying to pick out 5 or 6, any data you can get helps to quickly put together a 'story' for that house.

Last edited by le roi; 11-10-2008 at 05:44 AM..
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Old 11-10-2008, 12:14 PM
 
Location: Morehead City, NC
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On the subject of tax accessed values-Here in North Carolina property must be accessed at least 1 in every 8 years. Each county will determine the frequency. Every year is inpractical in that by the time one year is completed-The next year is already underway.

Now keep in mind as a general rule of thumb-A bank will not accept an appraisal more than 6 months old. Why? Because the market, as a rule of thumb, will have changed during that time period and invalidating the appraisal.
I bring up the bank appraisals simply to highlight that values change relatively quickly in a normal market. So The question with tax accessed values becomes, when was it done last?

We here in Carteret County suffered a tremendous sticker shock when the new values came out in January of 2007 is that it hadn't been done in 6 or 7 years.
Imagine comparing 2001 beach prices to 2007!!!!
But-Carteret County remained revenue neutral. Although the values jumped-The tax rate was cut almost in half.

rubber_factory said: "You also must consider that there are about 200 or 300 eligible homes for me to sort through. When you're trying to pick out 5 or 6, any data you can get helps to quickly put together a 'story' for that house."

If the property is for you to live in for here until forever-First and foremost use your wants, desires and likes as the yard stick all the while staying within budget.
I can not stress that enough-Stay within budget!! Go to your lender before looking at properties. Find out what type of loan and payments makes the most economic sense for you.

Weed thru the 100's of homes using your "I like" yard stick and your "economic sense" yard stick. I bet you you'll wind up with just a handful of properties. These are the properties that you take to the next level of investigation.
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