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Old 09-06-2019, 05:56 AM
 
6,882 posts, read 8,232,746 times
Reputation: 12013

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Quote:
Originally Posted by 1insider View Post
I guess we're progressive. It does seem logical, though. We don't have to pay taxes every year on the expected costs of selling the property. It wouldn't be fair to have to pay taxes on $375K if I'll only get $345K net is selling it.
Yes, but conversely, a Buyer would be paying taxes on $375K because that was the market value (presumably). How does anyone know what they'd net ahead of time on a sale? FSBO anyone? Anyhow, it's interesting to hear about different approaches. I don't know that one is more progressive than the other. It all hinges on the taxes ultimately paid, which is based upon both assessed amount and tax rate. Invariably, property taxes always seem to be too high!
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Old 09-06-2019, 07:20 AM
 
229 posts, read 92,850 times
Reputation: 395
This is something a Dad would say to his son -- they always like to crap on their son's acumen for no reason! "You should have put in an offer $100k below asking son" haha
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Old 09-06-2019, 08:40 AM
 
Location: Loudon, TN
6,059 posts, read 5,003,316 times
Reputation: 20652
When you actually don't know anything about a topic, it's best not to offer an opinion, especially if it's your sister. What made you think you knew more about real estate than she did?

Market value is typically based upon the sales prices of comparable homes in the immediate area within a particular recent time frame (3-6 months usually) and has nothing to do with tax assessment values. Only a qualified appraiser is going to be able to tell someone the appraisal value. Strangely enough in every home I've purchased (5), the appraised value is magically the same as the sales price, give or take a couple thousand. Imagine that!
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Old 09-06-2019, 08:47 AM
 
6,882 posts, read 8,232,746 times
Reputation: 12013
Quote:
Originally Posted by TheShadow View Post
When you actually don't know anything about a topic, it's best not to offer an opinion, especially if it's your sister. What made you think you knew more about real estate than she did?

Market value is typically based upon the sales prices of comparable homes in the immediate area within a particular recent time frame (3-6 months usually) and has nothing to do with tax assessment values. Only a qualified appraiser is going to be able to tell someone the appraisal value. Strangely enough in every home I've purchased (5), the appraised value is magically the same as the sales price, give or take a couple thousand. Imagine that!
Yes, imagine that! Smell something fishy?
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Old 09-06-2019, 10:12 AM
 
Location: Columbia, SC
9,143 posts, read 18,223,780 times
Reputation: 6809
Quote:
Originally Posted by TheShadow View Post
When you actually don't know anything about a topic, it's best not to offer an opinion, especially if it's your sister. What made you think you knew more about real estate than she did?

Market value is typically based upon the sales prices of comparable homes in the immediate area within a particular recent time frame (3-6 months usually) and has nothing to do with tax assessment values. Only a qualified appraiser is going to be able to tell someone the appraisal value. Strangely enough in every home I've purchased (5), the appraised value is magically the same as the sales price, give or take a couple thousand. Imagine that!
Not an appraiser, and not surprised. The appraisal is only to make sure the collateral (the home you're buying) is worth at least the amount being loaned. They don't want to come in too high or the appraisal might get flagged because the lender feels if the buyer go too good a deal, something fishy must be going on. Most of the appraisals I see are the sales price or within a few thousand of the sales price. If anything I've put is wrong, feel free to correct me but that's what I think.
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Old 09-06-2019, 11:34 AM
 
4,181 posts, read 3,872,851 times
Reputation: 11543
Quote:
Originally Posted by Scooby Snacks View Post
My sister and I got into a minor spat regarding the home she has a contract on. She recently put a contract on her first home. I'm very happy she's buying a home, am thrilled for her and her family, but when she asked me for my opinion, I made the mistake of telling her the house was overpriced and she got angry and accused me of being negative and incorrect. Maybe I'm wrong and the RE gurus here can clear it up for me.

The home is in Texas, a standard 3/2/2, built in 2014, with no add-ons but a couple of upgrades (flooring.) The home assessed last year by the tax district for $350,000. The seller originally priced it at $390K but within a month dropped the price to $375K, where it now stands. In my view, this means the house is currently $25K overpriced unless the appraiser shows the home's value increased $25K in the last year. If the new appraisal she gets says the home is still worth only $350K, either the seller has to drop the price or she has to bring the extra money to the table because the bank won't lend more than the home is worth (or both.) Am I correct? I'm not trying to be a know-it-all with my sister. I just suspect her RE agent may not have her best interests in mind based on some of her behaviors in the home buying process. Thanks.
Property tax appraisals tend to be lower than actual values. Sometimes, if the real estate market has taken a recent serious downturn, they are above actual values. And of course, the actual condition of the house has something to do with it, too.

Yes, it's possibly overpriced. Are you very familiar with the current state of the market there? If not, congratulate her and maybe get her a housewarming gift. Don't criticize, since you don't know the state of the market there.
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Old 09-06-2019, 11:41 AM
 
5,809 posts, read 1,470,815 times
Reputation: 4519
Quote:
Originally Posted by Brandon Hoffman View Post
Not an appraiser, and not surprised. The appraisal is only to make sure the collateral (the home you're buying) is worth at least the amount being loaned. They don't want to come in too high or the appraisal might get flagged because the lender feels if the buyer go too good a deal, something fishy must be going on. Most of the appraisals I see are the sales price or within a few thousand of the sales price. If anything I've put is wrong, feel free to correct me but that's what I think.
Mostly true. But I was hired to do an appraisal once on a house in Downey, California. It was a two bedroom home in a market of 3 bedroom homes and it wasn't going to make value so they cancelled it. So it does happen where the appraiser says nope.

And remember, comps are in the past. That maybe isn't a big deal in a more stable market, but when I first appraised in LA, prices were going up by 10% PER MONTH. I know it sounds crazy but it happened.
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Old 09-06-2019, 02:49 PM
 
7,110 posts, read 3,941,625 times
Reputation: 14694
Quote:
Originally Posted by Scooby Snacks View Post
My sister and I got into a minor spat regarding the home she has a contract on. She recently put a contract on her first home. I'm very happy she's buying a home, am thrilled for her and her family, but when she asked me for my opinion, I made the mistake of telling her the house was overpriced and she got angry and accused me of being negative and incorrect. Maybe I'm wrong and the RE gurus here can clear it up for me.

The home is in Texas, a standard 3/2/2, built in 2014, with no add-ons but a couple of upgrades (flooring.) The home assessed last year by the tax district for $350,000. The seller originally priced it at $390K but within a month dropped the price to $375K, where it now stands. In my view, this means the house is currently $25K overpriced unless the appraiser shows the home's value increased $25K in the last year. If the new appraisal she gets says the home is still worth only $350K, either the seller has to drop the price or she has to bring the extra money to the table because the bank won't lend more than the home is worth (or both.) Am I correct? I'm not trying to be a know-it-all with my sister. I just suspect her RE agent may not have her best interests in mind based on some of her behaviors in the home buying process. Thanks.
The tax assessment is NOT an appraisal and is irrelevant to market value.

If she's taking out a loan, there will be an appraisal. THAT is the number that will be important (appraisers generally try to validate the contract, if possible, is what I've read, and in my experience).

Want to know what the house's MARKET value is? Look at sale prices of comps in the immediate area.
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Old 09-06-2019, 08:41 PM
 
Location: planet earth
5,325 posts, read 2,041,214 times
Reputation: 11814
Blind leading the blind (brother ignorant of market/real estate complexities advising layperson/sister/buyer who is happy with her new home).
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Old Today, 09:09 AM
 
Location: Columbia, SC
9,143 posts, read 18,223,780 times
Reputation: 6809
Quote:
Originally Posted by Grlzrl View Post
Mostly true. But I was hired to do an appraisal once on a house in Downey, California. It was a two bedroom home in a market of 3 bedroom homes and it wasn't going to make value so they cancelled it. So it does happen where the appraiser says nope.

And remember, comps are in the past. That maybe isn't a big deal in a more stable market, but when I first appraised in LA, prices were going up by 10% PER MONTH. I know it sounds crazy but it happened.
Oh for sure, sometimes there just aren't comps to support a sales price, especially in a quickly appreciating bubble market like So. California, Florida, etc.
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