What is the difference between a real-estate appraisal on your home’s value and the tax appraisal value?
Posted on February 26th, 2010 in Renting & Real Estate | 5 Comments »
EM asked:
Currently, I only know the tax appraisal 109K, from the home I am planning to buy. (Home built in 2006, around 1500 sq) How much of a difference can I expect from the real estate appraisal? Lower or Higher? Are homes usually valued around the same as the tax appraisal? What kind of problems can I face if the appraiser values the home too low or high? The appraisal would be for the purchase of a home, right now the asking price is 96K( it's a foreclosure).
Flathead Lake Real Estate
Currently, I only know the tax appraisal 109K, from the home I am planning to buy. (Home built in 2006, around 1500 sq) How much of a difference can I expect from the real estate appraisal? Lower or Higher? Are homes usually valued around the same as the tax appraisal? What kind of problems can I face if the appraiser values the home too low or high? The appraisal would be for the purchase of a home, right now the asking price is 96K( it's a foreclosure).
Flathead Lake Real Estate
5 Responses
Sacramento Condos, Sacramento Homes
appraisal for tax pourposes should be based on Arm-length real estate deal. Your house sells for $150k, your taxes will be based on the sale price.
I like this as I take a look around the neighborhoods where I would buy a house to see what the others houses sold at, and then would base an offer in the midrange, minus a little.
On the quadrenial appraisal the county will sometimes base it on sq footage times so much a foot, plus the sq footage of concrete, and brick. They really try to get the value up if they can..
If they get out of hand you will need to protest the valuation. That is a real pain in the ****.
If appraised too low, the bank will not go with you on the loan. and tell you that your paying too much. Too high is good.
Flathead Lake Mt Real Estate
Tax evaluations are generally lower than regular appraisals (except recent sales). The tax values are only based upon square footage and neighborhood, not how nice your house is. Where I am from tax values are generally 20% lower than actual value, but every market is unique so there are no univsersal thruths.
If you are getting an appraisal for the sake of a loan for a purchase they often miraculously come out very near the sale price. If you are getting the appraisal to figure out how much to sell your home for, you might get a slightly inflated value but you need to remember appraisals are nothing but one person opinion (and a buyer may simply have a different one). There is no down side to a high or low evaluation since the info isn’t shared with anyone but the people who are paying for it, if not done in conjuction with a loan. But if it is for a loan, a low appraisal would simply set a limit to how much money you can borrow against it.
Chula Vista Ca Real Estate
Well both real estate appraisals and tax appraisals are based on the location of the home.
Usually (again based on state and local tax laws) a tax appraisal is lower than a real estate appraisal. (Some locations they are the same) It usually is based on some type of approved formula and has modifiers based on property usage.
Real estate appraisals are usually market based, where an appraiser will identify homes in your area that are close in style and size to yours that have recently sold. They will use these to come up with an estimated market value for your home. They will take into consideration all the aspects of a home, where a tax appraisal is done more around sq footage and acreage.
As for tax appraisal problems, well it doesnt affect market value of home, but it does effect your pocket book. property taxes are based off these appraisals. You will have a small window to challenge a new tax appraisal. these appraisals are not always fair and accurate. You can go to your local county/city clerks office to get information on tax appraisal process, percentage value of appraisal to market value, property tax rate and process to challenge tax appraisal if you feel it is not correct based on market value of home.
Good luck
Flathead Lake Mt Real Estate
Every area is a little different.. and I’m not sure where you live. BUT typically the tax appraisal is less that your “real-estate appraisal” or “market value of the home”. In additional the tax appraisal is usually from the previous year and used as a base for the tax calculation. Its always hard to say how much the market value will vary from the tax value b/c it has to do if you are in a declining market (as most are today) or one that is appreciating.
No real exact answer unfortunately. You can check out for an idea of the market value.
Herbal Medicine
Tax appraisal is determined by sales price and tax rate.
An appraisal is determined by market value. The appraiser takes comparable homes which have recently sold in the neighborhood and the condition of the home to determine appraised value. I wouldn’t worry about it coming in any different from what you are offering the bank because the appraiser is a third party hired by you the buyer to give an accurate value. Even if the property was worth more he won’t appraise the property for more then you offered. If it is a bank owned home then they already had an appraiser do an appraisal and probably a Realtor do a BPO. You can rest assure that the bank wants to sell the property and wants it sold yesterday so they are pretty good about pricing homes accordingly.
So it looks to me the previous owner paid 109k and you are paying 96k so your taxes will be lower then his but during a market on an incline your tax appraisal could go up.
Good Luck!