Real Estate Question

[pastorables]

I have heard the answer to this on HGTV, yet I can't remember it exactly.

The county Tax Accessor generally places appraised value upon our property for the purpose of paying taxes. Is the actual appraised value of a property generally more or less than the amount accessed for taxes?

Thanks,
pa

[jinjer]

I have heard the answer to this on HGTV, yet I can't remember it exactly.

The county Tax Accessor generally places appraised value upon our property for the purpose of paying taxes. Is the actual appraised value of a property generally more or less than the amount accessed for taxes?

Thanks,
pa

\

It depends on your location and their past practices. In Kentucky, taxes are assessed and placed on at the sale of the property, on the sales price. However, in the past, the tax assessments after that have not kept up with the sale or market values. It seems to be better than many years ago. Here in Huntsville, the taxes are usually close to or above the market value. Appraisals are for the purpose of loaning money and do not always reflect current markets. In other words, appraisers may tell the bank what they want to hear. However, they are the best we have. To tell about your tax records where you are, you could have a realtor pull all the current sales in the area and compare them to the tax records of all properties in the area.


Jinjer

[dolfan]

In Alabama, it is usually (almost always) less than fair market value. One reason is that tax appraisals lag behind market developments. Another reason is that tax assessors don't use the same appraisal methodology as appraisers who provide those services for lenders and homeowners do; private appraisals are more exacting in terms of comparable property and less apples vs. pears (which is what you kinda get with tax appraisals). Finally, tax appraisals are partly sheer guesswork. They tend to be inconsistent among homes of similar age, size and type, and they are arrived at by people who are simply trying to determine a fair percentage of increase in value from year to year that will not trigger massive blowback from voters and not cause too many equalization hearings. In other words, they'll charge what they figure they can get away with charging and factor in so much cost to that charge in terms of hearings, etc.

[Mole_J]

One e-book I read in my very short stint as a residential loan officer, said that the appraised value will come in at 20-40 thousand dollars more than the tax appraisals. This book is a few years old so things may have changed, especially with the value of land and houses dropping in most of the country.

[pastorables]

Appraisals are for the purpose of loaning money and do not always reflect current markets. In other words, appraisers may tell the bank what they want to hear.

Jinjer

You are exactly right. How then can one get a true appraisal? Would the bank use an appraisal on a property done beforehand by a certified appraiser or would they still insist upon one who would appraise in their favor?

pa

[jinjer]

Appraisers and appraisals change with the real estate market. Appraisers that are hired by banks usually are more forgiving and will set the price on the high end or at or near the sales price. VA and FHA appraisers are usually more stringent. Now, when the mortgage money tightens, and credit lending tightens, the appraisals become more "picky." Because the banks are being more careful to whom they lend.

An appraisal is done the same way the realtor does a market analysis. The appraiser looks at comparable homes that have sold in the area. For a market analysis the realtor looks at those on the market currently and those that have sold in the last few months, and then sets the sales price. Sometime, appraisers will choose comps that are really not comparable, either lower or higher, and base their appraised value on that. So, if they err in which comps they use the price could be wrong. So, if an appraisal comes in lower than you think you can appeal it by showing more correct comps to the subject property.

The value of any property is what the market will bear. So, if NO ONE wants to pay you $100,000 for you home after a period of time, then it is not "worth" that amount on the market. To evaluate the appraisal(s) you have or get, you can do some leg work on your own to see if it pans out. If you pay for the appraisal or someone has a copy of one, you can see what comps were used. You can then go to the court house and get the public records of sales in the area of like homes. A realtor can also pull that information for you, but it will only include properties that are listed on the areas MLS system, and not include "for sale by owners." There is one caveat, if you have a unique home, it can be more difficult to find comps in the area, so you have to assume some things to come up with a value.

Jinjer

PS Perhaps you are asking, "how does a nurse know all this stuff." Before I became a nurse, I had a business degree and my real estate license, and sold real estate in KY. My mom also sold for 26 years and my father was a home builder. Just an FYI.

[free]

Our county recently started doing 100% tax assessment...From what I've seen on my bill they hit it pretty close.

[DaJudge]

In Georgia, the assessed value is WAY lower than fair market value. On the order of $10K-15K less.

[Gerald Creasy]

In Louisville, Ky the tax acessed value was about the same as the market value of the house I owned.

[one love]

from what I have seen the tax value is less in many areas however there are some caps in states like VA where elderly people have paid there home off and dont get hit with the new market prices. For example is someone who paid 15 k for a house 50 years ago does not pay taxes on the current value of the home or they would be paying on 200k.
Hope I got that right

[dolfan]

In Alabama, "assessed value" is the amount of the "appraisal value" that gets taxed. For example, your homestead property "assessed value" is 10% of its "appraised value", usually. The tax rate is applied to the assessed value to determine the actual tax owed.

Richie, the appraisal generally must be less than six months old to be used by lenders. Most lenders will require a recertification of anything more than a month or two old, though. So, that means you still have to pay for an appraisal.

[pastorables]

Richie, the appraisal generally must be less than six months old to be used by lenders. Most lenders will require a recertification of anything more than a month or two old, though. So, that means you still have to pay for an appraisal.

Thanks. I had heard that, but my real inquiry has to do more with value for both selling a home and then buying one.

On the selling side, I have 20 acres with my home which the bank's appraisal doesn't even consider, yet it has to make the property more valuable. In talking to one prospective buyer, he seemed to want my home with 20 acres for near the appraisal of the home and 2 acres, etc.

On the buying side, the norm with my experience has always been for the appraiser to mark up a potential purchase by $2K or $3K. This doesn't set well with me for some reason. When you consider both sides of the spectrum, you desire a true appraisal. I don't want to be given an appraisal just for the purpose of securing a bank loan. I desire a true appraisal whether in my favor or not. What if a person found a good deal on a home, an appraisal just to get the loan could hurt the resell potential. Unless that is, a new appraisal would reflect some appreciation in the future, etc.

pa

[dolfan]

Not exactly sure why your whole acreage didn't appear on the appraisal if you were selling the whole thing together, and it is all connected land. Sounds like the appraiser goofed to me.

The bank may not be interested in loaning money on the land itself in a residential mortgage, on the other hand. Their appraisal order may have been for the house and, say, 2 acres because that is the immediate curtilage around the house. The rest of it may not be something that underwriting guidelines will allow a conforming residential mortgage to be written for. It may be that a buyer/borrower would need two loans, one for the house and curtilage (the 2+/- acres) and one for the other acreage on different terms than the residential mortgage.