Posted by sls on May 21, 1999 at 13:38:07:
Thanks for your help. I think I got it now.
questions on reading comps - Posted by sls
Posted by sls on May 21, 1999 at 09:54:53:
Thanks for all the great information on this site. I’m addicted.
Question about reading comps…Listed under assessment & tax information (on dataquick comps) the following is example:
Assessed Value: $131,760
Land Value: $39,528
Improvement Value: $92,232
Percent Improvement: 70.00
Tax Amount: $1,220
To get the price of the above property, would you add the assessed value and the land value to get value of property? What is improvement value? Is that added to assessed and land value?
Also, why is a property listed with 1.5 bathrooms when it has 2 bathroom? Is it incorrect information.
Thanks…
CAREFUL - Posted by John Behle
Posted by John Behle on May 21, 1999 at 19:30:09:
In most areas of the country the assessed value is totally useless and misleading. Keep in mind, the assessor that does the valuation is not doing a professional appraisal. He/she may have been an appraiser in a previous life, but obviously did not do it well enough to make a living at it. Sorry to offend any assessors, but I’m sure there are none reading this and if you are, YOU are the rare exception.
Assessed value means very little. The only good an assessor’s valuation gives you is some information on the property, but even that can be seriously flawed. I’ve seen where they miss half a basement, an entire basement, a second floor - or even assess the wrong property.
Assessed value should not even be relied upon as a rule of thumb. In a few - very few - rare areas of the country, the valuations are fairly close. Please use “comps”. Comparable properties from the sold book or MLS are what an appraiser uses. You won’t see an appraiser even reference the assessor’s valuation. It is worthless.
In choosing comparables, the most productive ones are the sold listings within 6 months. Listed properties are usually much higher, but your local Board of Realtors publish statistics giving you data on how long properties are on market, what percentage of list price they sold for and useful statistics related to market values and trends.
Do not place value in tax assessor’s valuations or appraisals.
Assessed value? in my area it is done like this… - Posted by Jim IL
Posted by Jim IL on May 21, 1999 at 13:13:22:
sls,
In my area, you simply take the “assessed value” and multiply it by three to get what the county feels the property is worth.
Thankfully, there idea of worth is always WAY under the actual market value.
Example:
on a home down the street from me, the “assessed value” is $30k, so they county says it is worth $90k.
But, a market analysis shows the sales on comparible homes to be $120k.
So, the “assessed value” means nothing.
What you need to do is get a list of several homes with like features, such as sq/ft, layout, ameneties, number of bedrooms, number of bathrooms etc.
Then, see the recent sales and take the average…that is the approx. FMV value of the home.
Although, remember, that you can sell higher if you offer good terms.
Often times the terms are what the buyer wants to know and they donot care about the final sale price.
A motivated buyer only cares about what a house will cost monthly and there initial cash outlay.
Match the two and you have a deal!
I also noticed that you said:why is a property listed with 1.5 bathrooms when it has 2 bathroom? Is it incorrect information.
1.5 baths means that one has a tub, shower, and all the things that make up a full bath,a half bath is simply a toilet and sink.
Therefore a 1.5 bath home has 2 toilets, 2 sinks, and one shower/bath tub.
hope this helps,
Jim
assessed value meaningless - Posted by NJDave
Posted by NJDave on May 21, 1999 at 11:32:06:
1)You will not be able to determine the ‘price’ of a property from the above data. The only thing that can determine ‘price’ is a closed sale.
2)The assessed value for the land and the assessed value for improvements should equal total assessment.
70% of total assessed value due to improvements, 30% land.
3)Comparing tax assessments is a highly inaccurate method to determine an approximate range of fair market value.
Get a book. Learn the differences between assessed value and appraised value.
Best short cut? Ask a local real estate salesperson or broker to provide a list of comparable solds and/or active listings.
That should give you a rough idea subject to location, age, condition, features, and market conditions.
Re: Assessed value? in my area it is done like this… - Posted by sls
Posted by sls on May 21, 1999 at 13:41:37:
Three times the amount of assessed value??? WOW. If this is true, I paid $186,500 for my house last year and today by calculating the assessed value three times the county thinks it’s worth $395,000. That’s to good to be true.
clarification - Posted by NJDave
Posted by NJDave on May 21, 1999 at 13:05:45:
the tax assessed value may be used to compare similar dwellings within the same tax jurisdiction for a rough comparison with a caveat:
TAX ASSESSED VALUATIONS may or may not have any relationship to market value. It is an arbitrary numerical calculation used to determine a property owner’s fair share of the applicable property tax burden.
While one property’s assessment may be recent, another, almost identical property’s assessment may be years old and as such not representative of anything but that moment in time…
For what it’s worth… forget about tax assessed valuations. A potential purchaser’s time would be much better spent doing market research.
Re: assessed value meaningless - Posted by Redline
Posted by Redline on May 21, 1999 at 11:59:15:
What you COULD do with assessed value - is take comparable houses and mark what they sold for. Then mark their assessed value. It’s possible, for similair houses in a similair area, to come up with a formular or range. IOW, you can say these houses sold for X% of their assessed values. It may give you somewhat of an idea of value but is certainly not scientific. I know some successful RE agents who use this method.
RL
Re: assessed value meaningless - Posted by sls
Posted by sls on May 21, 1999 at 11:38:29:
Thanks for the information.
I looked up this info from the post below mentioning website octitle.com/is.htm from Stacy(AZ)who gave the website as a resource to find comps.
When pulling comps from this website, I review the information on the sales comparables which show transfer value and assessed value.
Just needed some clarification as to what numbers on comps are best to bet on.
What you are referring to is “equalization ratio” - Posted by Ben
Posted by Ben on May 21, 1999 at 19:23:21:
Here, in NJ every municipality assigns an assessed value to a property and every municipality has its own equalization ratio. You take the assessed value and divide it by the Eq. Ratio and you are supposed to
comeout with a “rough” market value,(usually less). Example, a house in my town is assessed at $220,000. My town’s eq. ratio is 60%. Divide assessment by ratio and “equalized value” is $366,666. You cannot take somewhere else’s ratio and just apply it to your property, willy nilly. NJ has 565 different equal. ratios.
I think you misunderstood…can anyone else explain this better? - Posted by Jim IL
Posted by Jim IL on May 21, 1999 at 14:48:34:
I think you mis understood…or…
I did not explain it properly.
The “assessed value” in my area, is calculated with multiplying the number the county gives by 3.
But, perhaps your county gives you that value and you do not have to calculate it.
Example again:
county says, “$30k assessment”.
Assessed value: $90k ($30k times 3)
If you bought your home for $186,500, that is NOT your assessed value!(unless you got one heck of a deal)
And no this number you came up with is not good!
The county tax office bases your Real Estae taxes on this number, so a lower value is better for you.
So, we are happy to have our home under assessed by the county.
that makes for lower property taxes.
Perhaps someone else here can explain it better, but I definitely think you missed the point.
The bottom line is, “FORGET the assessed value” and get recent sales comps on like homes.
The true value of anything on the market, whether it be a car, a house or a bowl of dog food, is what a consumer is willing to pay for it.
The market determines the value.
Hope this clears it up a bit,
Jim IL
Re: assessed value meaningless - Posted by Stacy (AZ)
Posted by Stacy (AZ) on May 21, 1999 at 11:56:18:
sls-
The actual sales price, as NJDave said, it the value to use. It may be called transfer price on the reports, I can’t recall now.
Stacy
Tax assessed value doesn’t mean… - Posted by gwtx
Posted by gwtx on May 21, 1999 at 16:20:35:
Jack diddly squat.
Is that what you meant Jim? If it is, you’re right;^)
LOL
gary
Stacy’s right - Posted by Maurice (ca)
Posted by Maurice (ca) on May 21, 1999 at 12:13:20:
It is called “transfer value” & I think it’s a great resource for getting an ideal of market value.