Specific question about home values

Discussion in 'After Hours Lounge (Off Topic)' started by Robert_Z, Aug 7, 2003.

  1. Robert_Z

    Robert_Z Screenwriter

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    I talked to a seller today, and he gave me his asking price. But according to the 2003 appraisal, his asking price is $11,000 more than the total market value for his house. (The value dropped about $9,000 since last year.) Does this mean he is asking way too much for that house?

    My amateur thinking has me believing I should pay no more than FMV minus any allowances for paint/carpet/roof/etc. Am I right?
     
  2. CapnSharpe

    CapnSharpe Stunt Coordinator

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    Are you represented by a realtor? If so, he or she should run a competitive appraisal of the house to try and determine the market value. Ultimately, fair market value is whatever someone is willing to pay.

    Personally I would avoid the tax appraised value, assuming that's what you were looking at. There's no telling when the last time the tax man appraised the homes in the area. Odds are they just applied a formula wiithout giving it a second thought. Here in Houston they've started playing a game of reducing the value of the house and increasing the value of the land. It seems that you can't appeal the value of the land, only the house.
     
  3. Leo Hinze

    Leo Hinze Stunt Coordinator

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    Actual home prices and appraisals for the purpose of selling/buying are always different, and usually higher, than the tax appraisal. The trick is that you want your house to appraise on the low side for the tax rolls (to lower your taxes, especially in Austin!) and appraise high for selling.

    Use a realtor. They can give you an estimate based on actual selling prices of similar homes in your area.

    One thing to watch out for. Mortgage companies will only give you a mortgage based on what their appraisers value the house at. So if you overpay for the house, you might not be qualified to borrow the full amount necessary. Again, your a professional realtor should be able to help you with this.
     
  4. DaveF

    DaveF Moderator
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    What's a "total market value"? If, as Theresa thinks, it's the appraised value for tax purposes, then it likely has no bearing on the selling price. What matters is what comparable houses in the neighborhood are selling for.

    And don't expect to get any allowances for painting and carpeting, unless there are egregious problems. My (very limited) experience indicates that is just one of the costs of being a homeowner.
     
  5. Chris Lockwood

    Chris Lockwood Producer

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    > What's a "total market value"?

    What a willing buyer would pay. Has nothing to do with tax-assessed values.

    Also, an appraisal is just one person's opinion of value. A house can sell for more or less than that.


    > So if you overpay for the house, you might not be qualified to borrow the full amount necessary.

    Depends on how much you put down. The appraised value generally needs to be as much as the amount borrowed- the price doesn't matter. Example: You agree to pay 200k & put 50k down. The appraisal comes in at 180k. You might be overpaying, but since you're borrowing 30k less than the appraisal, getting the loan shouldn't be a problem.
     
  6. MikeAlletto

    MikeAlletto Cinematographer

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  7. DaveF

    DaveF Moderator
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    Mike, you're right in general. But this summer I saw a a seller's market with houses going above asking. I wasn't seeing or hearing about people getting price reductions for carpet replacements. For good houses, the sellers were not desparate.
     
  8. DonRoeber

    DonRoeber Screenwriter

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    When I bought my house two years ago, we offered what the buyer was selling for. However, my mortgage company wouldn't agree to the sale, because the selling price was more than the house was worth, compared to others in our neighborhood (we live in a townhome, so that was easy to). In the end, the seller had to drop their price, realizing that they'd probably have to do this for whoever they ended up selling to (they also could've still rejected our offer at this point).
     
  9. Jason L.

    Jason L. Second Unit

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    As someone who has worked for the Appraisal District in Dallas, the difference between the appraised value and the actual value can be way out of whack.

    Residential property in Texas is only required to be re-appraised once every 3 years [although it can be done more frequently].

    You should be basing the value on selling prices of similar property in the neighborhood.
     
  10. Robert_Z

    Robert_Z Screenwriter

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    Thanks for the replies. I wanted to make sure he was not asking too much. Apparently he isn't.
     
  11. Kirk Gunn

    Kirk Gunn Screenwriter

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    I'm curious, was this an appraisal from a certified appraiser for mortgage qualification purposes ? If you're purchasing a "for sale by owner", consider an independent appraisal from someone you hire, not a bank. It should only cost a few hundred and you will feel more comfortable with the comparables and the final cost. Plus you can ply them with questions on what effects a house's value.

    Good Luck ! Aint house hunting fun ?
     

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