Bidding on house

[leahjade]

Do you bid on what the house is appraised at or the sales price? The one we are looking at is priced at 3 times the appraisal cost so I don't want to get ripped off.

 

[Darcy03231]

Do you bid on what the house is appraised at or the sales price? The one we are looking at is priced at 3 times the appraisal cost so I don't want to get ripped off.

I would never pay more for a house than what it was appraised at. Also, keep in mind that banks won't lend money for more than what the house is appraised at.

I used to work at a law office that did real estate work and this issue came up from time to time. In almost all the cases the seller had to come down to the appraisal price so they could sell their home. We had one where the seller refused to come down so the sale didn't go through. The people loved the house, but the bank wouldn't lend so they had to look elsewhere.

 

[dzorn]

Are you talking about the apprasal for taxes by the city or the apprasal from the lender?

I would never pay more for a house than the lender appraisal. Appraisals for the city run about 1/2 of the house value around here so I would not pay three times that amount.

Denise in MI

 

[mchllevns]

You do need to differentiate between the appraised price and the assessed value. An appraisal typically isn't performed until after you negotiate the sale price...if the house does not appraise for the sale price, you can typically get out of the contract.

The assessed value is the amount the township/county gives to the house. Depending on where you live, assessments may occur only once every 10-15 years...you can typically find out from your Real Estate Agent or your local board of taxation what the ratio is for assessed value to market value (i.e. if a township has recently gone through a re-evaluation, the assessed value may be above 100%; the longer since the last eval, the lower the %).

 

[Claire&TheBoys]

Appraisal doesn't happen until you have a contract and are trying to get a loan.

If you mean assessed value, as in what the homeowner paying taxes on, that is probably not a good measure of what the house is worth. In Florida if you "homestead" a property, your value can only go up 3% per year, so like my parents, who have been in their home since 1972, have a very low assessed value and whenever the property sells, the new owner will have a significant increase in taxable value.

Most likely, the realtor is not going to list a home for much higher than what it's likely to be sold for. Your realtor should be able to show you what similar homes in the area have sold for and you can make your offer based on that.

 

[Muushka]

Do you bid on what the house is appraised at or the sales price? The one we are looking at is priced at 3 times the appraisal cost so I don't want to get ripped off.

Leahjade, would you consider asking someone with experience buying real estate to go with you on your house hunting?

 

[North of Mouse]

Are you talking about the apprasal for taxes by the city or the apprasal from the lender?

I would never pay more for a house than the lender appraisal. Appraisals for the city run about 1/2 of the house value around here so I would not pay three times that amount.

Denise in MI

Wow, you are so lucky on your taxes - here we are taxed (and county appraised) for more than our houses are usually worth. We appealed it last time and it came down about $50,000, but in today's economy should be at least $100,000 less still - no way we could get our tax appraised value here (Raleigh area) - I wish!

 

[Muushka]

Wow, you are so lucky on your taxes - here we are taxed (and county appraised) for more than our houses are usually worth. We appealed it last time and it came down about $50,000, but in today's economy should be at least $100,000 less still - no way we could get our tax appraised value here (Raleigh area) - I wish!

I'm in Wake County also. Wow, it surprises me how differently we are appraised. Our house was pretty much accurate since we moved here in 1996. Only in the last 2 or so years is it off, by maybe 20K. I would appeal it, but I am hopeful that the values will match soon.

 

[North of Mouse]

I'm in Wake County also. Wow, it surprises me how differently we are appraised. Our house was pretty much accurate since we moved here in 1996. Only in the last 2 or so years is it off, by maybe 20K. I would appeal it, but I am hopeful that the values will match soon.

Hello, fellow Raleighite We live N. of 98 off New Light Rd. so are not technically in Raleigh - but Wake County. We DO have 2 1/2 acres in a subdivision, and a large out-building, but out house is around 2,900 sq. ft. so not huge by any means, but just paid our taxes at $3,146 and that's county only, not county and city They should assess more often, because the economy just started to tank as they assessed last time - so it's "way" not accurate for us Happy for you though, and I also hope for the values to match before long.

 

[Muushka]

Hello, fellow Raleighite We live N. of 98 off New Light Rd. so are not technically in Raleigh - but Wake County. We DO have 2 1/2 acres in a subdivision, and a large out-building, but out house is around 2,900 sq. ft. so not huge by any means, but just paid our taxes at $3,146 and that's county only, not county and city They should assess more often, because the economy just started to tank as they assessed last time - so it's "way" not accurate for us Happy for you though, and I also hope for the values to match before long.

That makes sense.

 

[cats mom]

Appraisal doesn't happen until you have a contract and are trying to get a loan.

If you mean assessed value, as in what the homeowner paying taxes on, that is probably not a good measure of what the house is worth. In Florida if you "homestead" a property, your value can only go up 3% per year, so like my parents, who have been in their home since 1972, have a very low assessed value and whenever the property sells, the new owner will have a significant increase in taxable value.

Most likely, the realtor is not going to list a home for much higher than what it's likely to be sold for. Your realtor should be able to show you what similar homes in the area have sold for and you can make your offer based on that.

Might want to amend the part I took the liberty of bolding to read: a good realtor who is serious about actually selling the house.

I've been watching a house that's priced approx $200,000 more than anything else in the neighborhood has sold for in recent years. Yes, it has some upgrades the other houses didn't, but certainly not $200,000 worth, and I think you'd have to be nuts to pay anywhere near the asking price. But a realtor took the listing at that price and has let it sit on the market for well over a year (589 days last time I checked) without a single price drop.

I hope something similar is not the case with the house you found OP. But if the house really is priced that much above current market value, even if you offer a fair price, the seller may not be willing to accept your offer. You might have to move along and find a house that is priced correctly.

Good Luck

 

[mpls_mm]

We paid more than the assessed value and more than the appraisal value. It is tough to get a loan that way. We really wanted the house and knew there was nothing like it so finding a comp was impossible, so we feel the values really weren't reflected accurately. Sometimes you have to ask what is this worth to you, can you swing it and is it worth it. I am not talking 3x though, maybe 30 or 40k over. We also know we will have a hard time selling, it has to be the perfect person. We have also made upgrades and all those do is put you further in the hole and we know we won't get it back.

 

[DisCookie]

Agree with others that you are likely looking at assessed value that is used for tax purposes, rather than actual value of the home.

Your realtor should be able to easily pull up some comparisons for you of what other/similar homes in the area sold/sell for. That will give you a better idea of what you put in your offer for...

 

[dclfun]

Agree with others that you are likely looking at assessed value that is used for tax purposes, rather than actual value of the home.

Your realtor should be able to easily pull up some comparisons for you of what other/similar homes in the area sold/sell for. That will give you a better idea of what you put in your offer for...

We just put in a bid for a townhome that's bank owned and bid higher than the price asked. Reason? The price was lower than all the comps in the area and we also have to try and beat a cash offer. Our offer is still reasonable based on the comps and that's what we went with. There are many, many short sales in the neighborhood where we're looking and they are higher priced than this bank owned property. We did our own due diligence research and trust our realtor. I would get a good agent and let them do their job, but yes, do research the area in which you're moving and the neighborhood comps as it will make you feel more confident in your decision about how much to bid.

 

[ccgirl]

Realtor here. Agree with the others; you are probably looking as the assessed value and not the appraisal. Some areas assess at true market value and others use a different formula. Look at the comps, what similar homes in the area, are selling for to determine if that home is priced properly.

As for realtor's that wouldn't list more than a home is worth; that is not true. Final say is with the home owners. You have no idea how frustrating it is when you suggest a selling price and the homeowner refuses because their home is worth much more than that. You really have to take the personal feelings out of it and look at it as a business transaction.

 

[Muushka]

Realtor here. Agree with the others; you are probably looking as the assessed value and not the appraisal. Some areas assess at true market value and others use a different formula. Look at the comps, what similar homes in the area, are selling for to determine if that home is priced properly.

As for realtor's that wouldn't list more than a home is worth; that is not true. Final say is with the home owners. You have no idea how frustrating it is when you suggest a selling price and the homeowner refuses because their home is worth much more than that. You really have to take the personal feelings out of it and look at it as a business transaction.

Good advice. I have friends who put their houses on the market when the prices just began to fall. They refused to not get top dollar for their homes and ended up selling them for considerably less years later.

And then I had a friend if S FL who wanted to buy a house when they were at their peak. I just about took her in my arms and shook her and said 'you are willing to pay $250,000 for a 20 year old 2 BR 1 bath townhouse??????? Are you crazy??????'

So while your house is worth what the market says it is, sometimes common sense has to come into play.
If I felt that I could get a lot more for my house, I would wait until the market was better.
But if I needed to sell, I would sell it at what the Realtor said it could sell for.
And if $250,000 is what it would cost for a 2 BR 1 BA 20 year old townhouse, I would rent.