Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
We are first time home sellers thinking about selling our house (assume we are clueless about the process). The amount we owe is currently just about equal to our tax assessed value. Since buying, we've put on a new roof. I have two questions:
1. Am I correct that, even if we found a buyer who was willing to pay, say, $10,000 above our tax assessed value (roughly $200,000), the buyer would probably only be able to get a mortgage for our tax assessed value and we would, therefore, probably have to sell it for that amount?
2. When it comes time for our buyer to apply for a mortgage, would his/her mortgage company take the additional value of the new roof into consideration or would they simply look at the assessed value?
Again, please assume we are clueless in this matter (because we are!) and feel free to offer any additional information you might think is helpful.
1. Am I correct that... No
2. When it comes time for our buyer to apply for a mortgage... No
Again, please assume we are clueless in this matter...
Not a problem.
Your tax assessment number has absolutely zero to do with anything other than taxes.
Market price is what the market will bear and what the buyer is likely to pay...
and it is what the lender will base their willingness to lend against on.
If you owe less than market value you have "equity" and will get a check at closing
If you owe more you have a "short" and will need to bring a check to closing.
Definitely talk to a realtor and ask them to complete a CMA (Comparative Market Analysis) since you have misconceptions of assessed vs. market value of a home. A realtor should be happy to do so without a required commitment or fee.
Do not rely on websites like Zillow or Trulia to provide a market value for your home as they are notoriously inaccurate.
As others have said, your 'tax assessed value' has to do with taxes (and often doesn't include the land itself). In many cases, tax assessments will not be updated until the property is re-sold, and may, thus, be carried on the books at more/less than the 'Market value' .... which is what you need to understand.
Your mortgage qualification question is based on the 'Appraised value' versus the amount of the financed mortgage. If the Property Appraisal (paid for by the buyer as part of the purchase process; --- nothing to do with the tax assessment) does not equal the price being paid, the bank may elect to NOT approve the loan. This either gives the buyer an 'out' ... or puts you in a position of needing to lower the price, in order for the buyer to qualify for the loan.
How do you know when you speak with a realtor that they're giving you a true assessment of what your home's really worth? The asking price for our current home was $15,000 more than what we eventually paid for it and the sellers (between agents fees and what they owed on the house) wound up $30,000 in the hole. How do you know that your agent isn't just telling you what you want to hear?
What is actually owed on a home has nothing to do with the market value. Don't confuse the issue. In this modern age of short sales and foreclosures, many homes have sold for less than their market value or what was owed on them. Feel free to speak with more than one Realtor before making a final decision. Don't hesitate to ask about the comparables and how they were determined. Good luck.
Wow, you really need to talk to your local taxing authorities as well as real estate agents who understand local pricing. The relationship between the value assigned by the taxing authority (the one used to ultimately determine assessed value on which taxes are based) and by the market can vary wildly from place to place.
In my last location, it was very difficult to identify a relationship between the assessor's "market value" and what the house was really worth on the local real estate market. If the assessor gave your home a lower market value, it usually meant that your assessed value would be lower and, thus, your taxes would also be lower. My home sold for almost half a million dollars more than the value assigned to it by the taxing authority, which meant that my taxes were relatively low for the actual sale price of the house. I moved just a mile away to a place where the new taxing authority assigns market values that are much closer to the actual sale prices of homes.
How do you know when you speak with a realtor that they're giving you a true assessment of what your home's really worth?
You dont. You look at the realtors, cost market analysis (CMA) and comps and decide if you believe them or not. If everything looks reasonable, the realtor did a good job. OR.... You can hire an appraiser for $400 or so to give you an impartial appraisal. This will be closer to what a bank will appraise a buyer for.
Quote:
Originally Posted by ZoomZoomZoom
The asking price for our current home was $15,000 more than what we eventually paid for it and the sellers (between agents fees and what they owed on the house) wound up $30,000 in the hole.
Yep, it happens. It's possible you will owe more than what your house is worth. There are no guarantees you will make money on the sale of your home.
PS. The tax assessment figure means nothing. Its simply used for real estate tax purposes.
How do you know when you speak with a realtor that they're giving you a true assessment of what your home's really worth? The asking price for our current home was $15,000 more than what we eventually paid for it and the sellers (between agents fees and what they owed on the house) wound up $30,000 in the hole. How do you know that your agent isn't just telling you what you want to hear?
You don't know; some realtors lie and others are downright incompetent. However most realtors, even the dishonest ones, will give you a ball park figure on what your house is worth and what to price it at, because they do not want to waste their time trying to sell a house priced outrageously, nor do they want to give it away when they could have priced it higher and made more on the sale. They want it to sell in a reasonable time frame, just like you do. If you don't trust the realtor who gave you the comps, get a second opinion from another realtor.
What you want to find out is what your house is worth, that is what a buyer would pay for it. Keep in mind that the amount that one owes on a property, the amount paid for the property, the amount one put into the property in improvements, and the amount the tax assessors assessed it for all have no bearing on what it is worth.
When you look for a realtor, forget about those realtors who have sold billions in real estate last year and are the top in the city. You want to find a realtor that KNOWS YOUR NEIGHBORHOOD. Find a local realtor who has sold homes in your neighborhood, or has a listing or two in your neighborhood or an adjacent neighborhood right now, or an office very close by. They will give you the most accurate comps.
Good luck, keep us informed, and don't be afraid to ask more questions.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
