# Research property values before buying



## uyk7 (Dec 1, 2002)

As a Christian, I cannot just "stand by" and let someone get ripped off. There is a piece of propery that someone is trying to sell for 4X its assesed value. I know this because I stopped by the courthouse and got a copy of the tax records for this particular property. 

Before buying, contact others (PM) who live in the area or, better yet, contact the courthouse to find out what the assessed value is. Remember, buyer beware.


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## SteveD(TX) (May 14, 2002)

Sometimes, there is a huge difference between the assessed value and actual market value, even though they are supposed to be the same.


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## hillsidedigger (Sep 19, 2006)

4X is nothing. Around here the last few years, land was being sold to 'halfbacks', in some cases, for 300X it's assessed value.

Case in point: A developer contracts to purchase 1500 acres for 2.5 million dollars ($1667 per acre). He has a pseudo-subdivision plat prepared, flies prospective buyers over property in helicopters, says roads and utilities are to be built, contracts hundreds of buyers to several hundred thousands of dollars for a 'lot' (some lots as small as 0.14 of an acre), splits town with the money and it turns out the developer didn't even own the land he ws showing. The developer had owner financed the developer's purchase of the property with nothing down.


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## mylala (Jun 3, 2008)

Not saying that you are wrong I don't even know what propery you are talking about, but the tax assessed value is not the same as it's market value. There is a $50,000 difference in my tax assessement and the appraisal I had done a year and half ago. It appraised for 125k. I'd be a fool to list my house on it's tax assessement. 4x seems a lot off though, but maybe they are only trying to rip someone off by 2x.


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## hillsidedigger (Sep 19, 2006)

I paid $50k for 12 acres back in 1995 and my first 2 annual tax-bills assessed the property at $17k.

A few months ago, I sold the place (still un-improved) for $155k although the current tax assessment had inceased to about $70k.


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## Evons hubby (Oct 3, 2005)

I do this stuff for a living and one of the biggest problems I encounter is people who try to figure out property values at the courthouse. They will go to the tax office and look up assessed value, some will go to the clerks office, look up deeds and see what the current owner paid for it. These two factors combined usually will beat these people out of buying the property they want. Neither of them have any relationship to the current market value of a property. That is determined by one thing and one thing only. The value of property is determined by what one feller is willing to pay, and what the other feller is willing to accept, when that number happens to matchup, we have established the current value for that property at that time. Tomorrow it may be up or down who knows? I have had professional appraisals done on the same property as many as 4 times and get a wide variety of "market value" depending on who is doing the appraisal, who they are doing it for, and the purpose of the appraisal. I think one of the wildest ones was a 25 acre tract that had sold for 2000 per acre, pretty much "going price" for the type of land it was, I had two separate appraisals done for two separate banks, one valued it at 400 bucks per acre, the other at 3500 per acre. The only real way to have a decent guess at property value is to watch the sales, what has sold recently in a similar area, with similar property, average those prices out. Then if you like the property, you play the game, negotiate in your best interests, arrive at an agreeable price to both parties and then you pays yer money, and you takes yer chances. 

Edited to add: beware of realtors claiming to be "buyers agents". While it is a legally acceptable thing, its very difficult to put into practice. Agents get paid a percentage of the sales price, do you really think they are going to go to a lot of trouble to negotiate the price "down" when its going to take money out of their pockets to do so? If you believe that I have some ocean front property in Arizona I would like to discuss with you.  If you want a buyers agent, offer to pay him ten or twenty percent of every dollar he gets the price down on top of his regular commission he gets from the sellers. You might get his/jher attention that way.


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## uyk7 (Dec 1, 2002)

Fine. I wash my hands of the whole affair. If someone purchases the property then more power to them. I understand charging a large price if the property was being developed for homes but this isn't. {edited out insulting comment - Angie}



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## Mike in Ohio (Oct 29, 2002)

uyk7 said:


> Fine. I wash my hands of the whole affair. If someone purchases the property then more power to them. I understand charging a large price if the property was being developed for homes but this isn't. {edited out insulting comment - Angie}
> .


Then don't buy. Have you not heard the phase "Caveat Emptor"?.

Mike


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## SteveD(TX) (May 14, 2002)

uyk7 said:


> Fine. I wash my hands of the whole affair. If someone purchases the property then more power to them. I understand charging a large price if the property was being developed for homes but this isn't. {edited out insulting domment- Angie}
> 
> 
> 
> .


Actually, it's up to the seller to get as much for the property as he possibly can. He'd be stupid not to. And it's also up to the buyer to pay as little for the property as he possibly can. He'd also be stupid not to.

Typically, they meet up somewhere. And that's called MARKET VALUE.


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## Macybaby (Jun 16, 2006)

Our house in WI was "assessed" at about 84,000. We sold it for $295,000

Was not robbery, it was that all assessed values were equalized to the value in the base year and that happened to be a loonnggg time ago.

After we sold the place, the property taxes actually went DOWN.

I know our assessed value here in SD is well below that the property appraised out for when got the equity line two years ago. Our house in MN was also assessed way below actual value.

I'd never assume assessed value for property taxes has any relation to real value, but I'd sure look at what other properties are going for around the area before purchasing any land!

We have 40 acres, and when we talked to the bank, they told us that we would not have any problem with the equity line because the land alone would have doubled in value in the four years since we bought the place. Location has a lot to do with it.

Besides, what someone askes for something, and what they get is not always the same. I would not call it "greed" though, if you can make a nice profit on a parcel, why not? I'd never trust a seller or their realtor to give me the facts, so hopefully who ever they sell this property too won't be a total DA about it. Can't protect people from their own stupidity.

Timing also can have a lot to do with it. Some time property values do go up substantially in a very short period of time. Most times it's best to let things go - you are only responsible for your own actions.

Cathy


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## DamnearaFarm (Sep 27, 2007)

This wouldn't happen to have anything to do with the property you sold another member of this forum, would it? Especially considering you offered to buy it back at the price they paid and the seller refused?

I hope i'm wrong.....


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## starjj (May 2, 2005)

Value of the property is what a person is willing to pay for it and if the seller agrees that is the value. What you want to do is look at comparable houses or places in the area you are considering but since no two places usually are the same that can only give you a general idea of prices. Tax records and such from the court house have little meaning as to what the value is. You can always find out what a person paid but it also has little to do with what they can sell it for.

Edited to add I think Rose is right sounds like your offer to buy the property for what they paid for it being refused didn't sit well with you. (personal slam edited out - Angie)


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## Snowdancer (Sep 23, 2002)

What would be the incentive to buy 'investment' property if down the road it wasn't likely that you could sell it for way more than what you paid? 

If someone is willing to pay the asking price after getting an appraisal, why would it be anybody elses business but the seller, buyer and possibly a mortgage holder?


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## tiogacounty (Oct 27, 2005)

uyk7 said:


> As a Christian, I cannot just "stand by" and let someone get ripped off. There is a piece of propery that someone is trying to sell for 4X its assesed value. I know this because I stopped by the courthouse and got a copy of the tax records for this particular property.
> 
> Before buying, contact others (PM) who live in the area or, better yet, contact the courthouse to find out what the assessed value is. Remember, buyer beware.
> 
> ...


 In this county assessed value is 25% of market value at the time of assessment. Therefore, your assumptions are way off base, and of little value. The other issue is that it isn't unusual to discover that assessed values are based on evaluations done three or four decades ago, so in many cases the information you collect at courthouses can be grossly outdated. Land is worth what a person is willing to pay for it. I can take a ten minute drive from my home, and show you building lots that are listed at $5K and others that are $270K. Are they fairly priced? Absolutely, if a customer wants the product for that price then they certainly are fairly priced. If I would want to move to an area I know little about, IMHO I would clearly avoid both suggestions you have made. Unless you are looking at actual sale data, know all the details of each transaction, and only look at info. that is less than six months old, courthouse info. is of little value. I would also hesitate to put a lot of faith in the opinions of those you PM. I have seen too many cases where locals think every price higher than they paid in 1962 is simply outrageous, and only a city fool would pay that much. Recently, as markets plummet, I have seen others who are confidently overvaluing their holdings, in some cases by 40% or more. The best way to fairly value a property is to spend a few hundred for a professional appraisal. This is generated by a party with experience, current data, and no stake in the result. Until then declaring any transaction as being a fraud is nothing but a guess.


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## tweezle (Sep 20, 2006)

If you are from the same Tioga county that I am (in PA), I will definitely beg to differ. Our tax assessment is just about right on with current market value. We've been in the market for a long time for just the right place, and watched the market skyrocket then fall. Even the professional appraisals aren't truly accurate when we've looked at homes. UYK7 does have a point that one from another area can be "taken". We've watched "city folk" come here and pay for things that made others in the area laugh at how silly they were. They could have purchased so much lower if they had done their research. Sadly, those same silly "city folk" drove everyone's taxes higher as the values of properties were assessed higher. Good for those looking to see, but awful for those that want to stay.


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## MN Gardener (Jan 23, 2008)

Every market is different and researching the SALES is what matters most. In are county the property gets looked at every 5 years, so the assessed value could be way off. If you are having financing done on the property most banks require an appraisal and I would ask for a copy of that. If you are planning on paying cash for it, I would still have an appraisal done. Ask the appraiser for market value and if the market is declining, stable or increasing. Find an appraiser who has no ties to the seller or realty company the seller is using. A good appraiser will know their market and provide a good market value of the property you are purchasing. You can put a "must appraise for purchase price or more" clause in you purchase agreement in case it does not appraise for what you are paying for it. A good buyer's realtor can help tremedously too, especially in the market we are experiencing right now.


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## nathan104 (Nov 16, 2007)

I think its funny when someone starts a post with "As a christian", and then has to have an insulting remark they made deleted by a moderator, and was trying to basically sabotage someones sell of property when they couldnt buy it back for the same price they sold it for. As a christian, I had to point that out, lol.


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## tiogacounty (Oct 27, 2005)

tweezle said:


> If you are from the same Tioga county that I am (in PA), I will definitely beg to differ. Our tax assessment is just about right on with current market value. We've been in the market for a long time for just the right place, and watched the market skyrocket then fall. Even the professional appraisals aren't truly accurate when we've looked at homes. UYK7 does have a point that one from another area can be "taken". We've watched "city folk" come here and pay for things that made others in the area laugh at how silly they were. They could have purchased so much lower if they had done their research. Sadly, those same silly "city folk" drove everyone's taxes higher as the values of properties were assessed higher. Good for those looking to see, but awful for those that want to stay.


 No, currently we are stuck in Monroe county which has become just another borough of NYC. Our county government uses the 25% valuation. Actually, even though you "beg to differ", you completely support my position. The OP ends up at a courthouse, looks at something he doesn't understand and declares that he has been tasked with a "Christian duty" to protect others. Reminds me of a few Monty Python sketches, but that's another issue. The county assessment situation in our state can be ugly, confusing, completely different from one county to the next, and grossly unfair. In Carbon, the locals worked the system to the point that the folks with new homes were bearing the vast majority of the tax burden. A few short years ago, it was possible to own an older home with a total tax bill of $400 while the same footage and value in a new home was generating a bill of $2400. The trick was to keep the county from reassessing for forty years or so. At this moment, Luzerne is going through a very ugly battle on the same issue. The folks who were happy to live in the same row home for the last forty years, and pay a small portion of their real tax burden, are now screaming like mashed cats. 
I have actively watched the market in the Wellsboro area for the last decade and I somewhat agree with you. That said, the market did not even get remotely close to the gains and losses that much of the state saw. Compared to all of Eastern PA. "Skyrocket" is a word that hardy applies. More like a slow, sluggish bump followed by a decline. I live on an 1.25 acre lot that sold for $25K in 2000, five years later, similar properties were going from $100K to 125K , now it probably dropped $50K, but it's only a guess because the very, very few buildable parcels here are sitting on the market for years, very little has sold in the last year to eighteen months We nearly pulled the trigger on a nice house in Wellsboro in 2002. From what I see, the place would of lost a bit of value by now, rougly 10-20%. Many of the properties we notice in the local publications seem to linger on the market for years. Personally, I can't wait to find a nice place in Tioga, but I understand the issues locals have with their perceptions that "all the move-ins are wrecking the place" Try spending a few decades in a place where every 7-8 years the population increases by more that the current census in your county. It gets old. Hope you find a great property and all goes smoothly! Good luck.


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## adamtheha (Mar 14, 2007)

Dollar value is practically meaningless. If someone will pay the price, then that is the market for that item. For example:
I bought 156.8 acres of land for $135k near Calgary AB. It's worth almost double that. Did I do something wrong? No, that's what it was worth to the previous owner.
Today I sold a 2000 Honda Accord for $4600. It's worth at least 7k, but I needed the money. The buyer is getting a good deal, and I'm getting my money.
I don't even know what the assessed value is, and I don't care. My land is worth something based on what I can do with it, not how much money someone will pay for it. I can make a lot of money off my land (if I work hard). 

What I can't understand is why people want "houses" that fall apart, and earn no money, when they can have land that lasts forever, and earns it's keep if worked? I point this out to all of my friends who chide me for leaving the city. You can keep your house. I'll have my land, even though I have an hour long commute!


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## Dave (May 10, 2002)

Prices are determined by whatever the market will bear. 

I will avoid that certain website in my searches for land and small farms after seeing the nonsense done here recently.


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## Deniser (Sep 26, 2008)

On the flip side, we had an agreement on a house in PA back in 1992 for what the realtor deemed a fair market price. As the mortgage process progressed we found we were at the mercy of the appraisor because the bank would not lend the buyers more money than what he thought the house was "worth"...while it thankfully turned out to be just fine, it has happened that way before with other real estate transactions. Sometimes it's harder to say "You win some, you lose some!" (Hope I've described that correctly!)
Consider that with how lending has gone in the recent past....


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## bill not in oh (Jul 27, 2004)

uyk7 said:


> As a Christian, I cannot just "stand by" and let someone get ripped off. There is a piece of propery that someone is trying to sell for 4X its assesed value. I know this because I stopped by the courthouse and got a copy of the tax records for this particular property.
> 
> Before buying, contact others (PM) who live in the area or, better yet, contact the courthouse to find out what the assessed value is. Remember, buyer beware.
> 
> ...


I'll sell you my property for the assessed value....


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## L.A. (Nov 15, 2007)

States differ in how to value "Assessed Value", some are full market value, some are a rcnld cost, so you need to know how the assessed value is determined in the particular area. Most important!!! One Sale Is Not A Market!!! If a property sells that price is not market value. Market value is determined by the analysis of many sales of comparable properties.


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## katydidagain (Jun 11, 2004)

Offer me what mine is assessed at and I'll laugh at you; come back with 4x that value and I might listen without giggling. Those "values" are meaningless where I live. Appraisals are based on recent comparable sales, replacement value of improvements taking into consideration depreciation, raw land values, location-location-location and more factors than I care to type tonight. Or in other words, the price is based on what a lender will lend on a property or what a willing, able and motivated buyer will pay. 

Period.


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## tiogacounty (Oct 27, 2005)

Deniser said:


> On the flip side, we had an agreement on a house in PA back in 1992 for what the realtor deemed a fair market price. As the mortgage process progressed we found we were at the mercy of the appraisor because the bank would not lend the buyers more money than what he thought the house was "worth"...while it thankfully turned out to be just fine, it has happened that way before with other real estate transactions. Sometimes it's harder to say "You win some, you lose some!" (Hope I've described that correctly!)
> Consider that with how lending has gone in the recent past....


 You just described the relationship between all parties involved in a legitimate transaction. It sounds as if everybody did their job correctly, and everything went well. I'm not sure how this leaves you at the "mercy" of anyone? The appraiser has to research and document the value of the property at a moment in time. They need to be able to provide a rational, fact based assessment of the property, it's attributes and deficits, and how it compared to like properties that have recently been sold. This is far from an opinion of a property's "worth". The bank is only concerned about protecting their interest. The numbers don't work on an appraisal? The bank doesn't lend, or they give you the option of adding your cash to make the numbers work, or getting the seller to reduce the price to reflect current market value. By throwing more of your own cash in the pot, you assume risks that the bank is unwilling to take.(often a stupid idea) I can't imagine having much confidence in a bank that did it any other way.


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## L.A. (Nov 15, 2007)

tiogacounty said:


> This is far from an opinion of a property's "worth".



Opinion of value is exactly what an apprasial is. The opinion is derived by methodical approaches to value.


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## NorthCountryWd (Oct 17, 2008)

I'm a certified residential appraiser in Vermont and can answer any questions about the process. 

The biggest difference between appraisers opinion of market value and every one elses is that we have to document our evidence and are held responsible for our conclusions and opinions. Our license and insurance is one the line every time we sign a report. Real Estate brokers/agents, tax assessors (if they're not appraisers), analysts, mortgage brokers and insurance agents aren't held responsible.

The market is fluid and changes day to day. That's why there is always an "effective date" on the report.

"Assessed" value is completely different from "market" value.


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