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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.
Last edited by Scooby Snacks; 09-04-2019 at 06:52 AM..
Reason: Wrong word.
Tax value is essentially a simple formula/algorithm. It cannot include all the details of condition and desirability for a specific house. Your sister has looked at several houses presumably and this one suits her at a price she and her realtor think is fair. When you spread that 25k you are worried about over the term of the loan (30 yrs?) it is a few dollars a month. Hopefully she will make that back and more in appreciation in a couple of years. But finding a house you love is worth it
By the way the tax value is an assessment not an appraisal
Last edited by luv4horses; 09-04-2019 at 07:20 AM..
Tax value is essentially a simple formula/algorithm. It cannot include all the details of condition and desirability for a specific house. Your sister has looked at several houses presumably and this one suits her at a price she and her realtor think is fair. When you spread that 25k you are worried about over the term of the loan (30 yrs?) it is a few dollars a month. Hopefully she will make that back and more in appreciation in a couple of years. But finding a house you love is worth it
By the way the tax value is an accessment not an appraisal
That makes sense. And yes, you're right. I used the wrong word. I was my meaning. If the assessed value of the home and appraisal match up closely, would she have to bring the extra money to the table? I am also curious for myself. I'll be buying a home before long as well.
You are likely incorrect. Tax Assessed values in Texas are often far different from market value, given the fact that it’s a non disclosure state.
Well then, that's great! This is a case where I would be glad to be wrong. She'll be getting what she wants at (hopefully) a good price. Or even if not, she'll be getting what she wants at least.
That makes sense. And yes, you're right. I used the wrong word. I was my meaning. If the assessed value of the home and appraisal match up closely, would she have to bring the extra money to the table? I am also curious for myself. I'll be buying a home before long as well.
In some towns the assessed value is within a few percent of appraised much of the time. Of course every year after the assessment it differs more. But it depends on what features the accessor uses. I once lived in a house in the historic district of a nice town. Somehow the assessed value was about 15% of what I sold the house for. But maybe that was true for everyone I never thought to check.
That makes sense. And yes, you're right. I used the wrong word. I was my meaning. If the assessed value of the home and appraisal match up closely, would she have to bring the extra money to the table? I am also curious for myself. I'll be buying a home before long as well.
I'm going to be mean for a moment...for you and your sisters sake.
You don't know the assessed value from appraised value or sales value so you probably aren't going to be very good at determining fair market value. You don't know what happens if it doesn't appraise, so safe to say you aren't a qualified adviser. (BTW, seller and buyer can renegotiate and reach an agreement or buyer can void contract if not. Most common occurrence is seller reduces to appraised value. Sometimes seller/buyer meet in the middle or adjust closing cost/etc.)
Your sister is happy with the home and price, which we have determined you know nothing about, so why are you bringing her down? That just makes you the bad guy. Is it perhaps better to be supportive and ask questions about how she determined the home was a good value and accept her explanation if it makes sense? She was after all the ones looking at comparable homes so she probably got a pretty good idea how it stacked up to others in the same price range and picked it over the others.
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.
Tax value and appraised value are apples and oranges (both fruit, but not the same).
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 Assesment is the local government's algorithm deciding what its worth for purposes of property taxes.
An Appraisal is a financial instrument used by banks to help insure that their loan is in line with the value of the home. People purchase appraisals for other reasons as well, but most of the time its ordered by the lender and the buyer pays for it.
Assessed values have a basis in reality, but they aren't an accurate representation of market value.
Scooby.... go apologize to your sister for being a wet blanket... and wish her well.
It's good to watch out for her, but make sure you know what you're talking about when you do.
Last edited by Diana Holbrook; 09-04-2019 at 11:15 AM..
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