Neep HELP...Unique Situation! - Posted by Ehab

Posted by dell-ohio on July 27, 2003 at 22:04:51:

Using tax apprasials to determine value can get you into a lot of trouble. I know in this area some of the counties do not use FMV for tax purposes. One county uses 70% of FMV.

Another rxample, a friend of mine just purchased a house. It had been on the market for three years. Started at 595,000 down to 495,000 after one year (tax appraised value) dropped to 425,000 a year later. I suggested she offer 250,000. She offered 275,000 bought it for 325,000. She has the tax appraisers come out and reappraise the house. They appraised it at her purchase price. Dramatically reducing her taxes.


Neep HELP…Unique Situation! - Posted by Ehab

Posted by Ehab on July 27, 2003 at 18:09:34:

I found a pretty house ($0 repairs) on MLS that was in foreclosure and was listed for 189K. I looked up its appraised value on the tax roles just to get an idea of its value and it was appraised at 300K!!!

Since the spread looked so good, I naturally asked my realtor to pull me some comps.

This is where its gets interesting…

My Realtor called me and told me that a house hasn’t sold in the last 6 months but that the comps came back around the 160k - 180k range.

HOWEVER…he also told me that the neighborhood just recently went through a revaluation because the houses were all valued too low and all the houses went up in value around 100K. When I look in the tax roles I did see that last year it was valued at 176K but jumped up to 297K this year.

Is this a house I should even consider? What’s it really worth, 180 or 300? I was going to get a loan from a HML and retail it. Has anyone ever heard of this? What other strategies should I consider. This would be my first deal.


Sounds like a “Pass on” to me … - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on July 28, 2003 at 24:47:29:


This sounds to me like a “pass on it” property. It may be worth $175K. What are you going to sell it for? What are you going to offer on it?

I think it is good you are willing to jump. I think, however, that you are not ready to jump. You have not done your real estate training. You might jump and fall flat on your face. In real estate that means losing a lot of money and perhaps interest in investing.

It sounds to me as though you are not yet ready to start spending your money buying properties. You don’t know the values of properties in your area.

I recommend that you use Bill Green’s “Hundred House Rule” from his book “Think Like a Tycoon.” You look at one hundred houses which are offered for sale. Keep some brief notes on each. Then, follow up a few months later and find out for what they sold. In a few months you will know the market value of properties in your target market. Then you will not have to ask values of us strangers who don’t even know where your market is.

Good InvestingRon Starr*****

Rule Number 1 - Posted by Kristine-CA

Posted by Kristine-CA on July 27, 2003 at 22:55:06:

Ehab: I know there are many rules that qualify for Rule Number 1, but definitely in the top ten for newbies is do not use tax assessment value for anything other than tax assessment value. In some cases, tax assessment can be a general guide or an indicator of the last sale price. But tax assessment value is NEVER a replacement for using comparable sales to determine FMV.

You can get an agent to give you comps (or pay them to give you a BPO)) or you can get recent sales info and do your own determination of comps. Read JP Vaughan’s article on this site for more information on doing your own comps.

Even after you determine FMV, the property is worth only what someone will pay for it. In most cases when owner/occupants need lender funds, the property is worth what the bank determines the value is through an appraisal.

Learning FMV for your area is an experience thing. So in the beginning make sure your deals have lots of room for error.

Just my opinions here. Sincerely, Kristine

Re: Neep HELP…Unique Situation! - Posted by Kelly

Posted by Kelly on July 27, 2003 at 22:32:06:


Look up the property at your court house and find out what the bank was actually owed, they may come down a fair amount.

Good luck

Re: Neep HELP…Unique Situation! - Posted by Arthur

Posted by Arthur on July 27, 2003 at 18:22:02:

I house is worth as much as someone is willing to pay for it, and if it hasn’t sold in 6 months at its current price, then its not been sold too cheap.

The market decides on the price of a house, not the tax dept.