Home Buying in Jacksonville>Question Details

Db, Other/Just Looking in Jacksonville, NC

Can researching tax and property history of homes for sale lead to unrealistic offer to buy?

Asked by Db, Jacksonville, NC Sat Aug 18, 2007

I have been searching for a new home in Jacksonville NC. I reasearched the tax paid and last amount paid for the property. I also researched what other properties were bought for in the past and recently researching tax records. This gave me the impression that the buyer was asking far too much. Is this realistic shopping with today's market in jacksonville NC?

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By searching the tax info. you may not get a real bargain, but it certainly shows you how much room there is for negotiation. For example if the home sold for $100,000 last year and they are now asking $200,000, you know that the profit of $100,000 means that they may be more open to negotiation. But if the home sold for $200,000 last year and the now asking price price has dropped below that $200,000, there is probably very little room to bargain.
3 votes Thank Flag Link Mon Aug 20, 2007
Did you mean to say the SELLER is asking far too much? Not sure I understand. Are you saying you would like to determine how much of a profit the seller is making off their investment? If you were selling your house and a prospective buyer looked at what you paid for it, do you think they would be very objective in determining what a "fair" profit is for you? What if the seller inherited the home from his parents who owned it for 50 years. So the seller paid $0 for the home, should he sell it for $50,000 because he only owned it a month and $50,000 is a "fair" amount of a profit to make?
3 votes Thank Flag Link Sun Aug 19, 2007
In some ways I think looking at the tax records is an interesting exercise, but I often tell people don't rely on them at all for an accurate predictor of value. Some homes and neighborhoods are spot on. Some are way high, and some are way low. I often use one home I listed as an example. I told the owner I was pretty sure it would sell at X. He produces his tax statement that says X+20,000. I still told him X. About a month later he got the new tax statement that should X-$20,000 as the value. That's a $40,000 swing in one year. It still sold at X. I think it also depends on how successful the owner is at fighting. Do they fight appraisal every year? How well do they fight and do they use a professional to fight the appraisal. I've seen some people be very successful in fighting and over a period of 10years or more have appraisals 20-25% below everyone else in the neighborhood. So in the end....making offers solely based on tax appraisals to me is not a good idea.
Web Reference: http://www.teamlynn.com
2 votes Thank Flag Link Sat Aug 18, 2007
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
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While this can certainly give some insight into the seller's financial position, and therefore give some clue as to whether or not there'd be room for negotiation (as Denise said), don't always assume that if a seller seemingly underpaid for a house 5 years ago that they are now seeking too much profit.

There are other things to consider that may not be reflected in the records, such as improvements made, upgrades, etc, that may have considerably brought up the value of the home.

I love using the tax records to attempt to get inside the seller's head, as it can provide some invaluable insight, but ultimately, your offer must be combined with true, current comps.
1 vote Thank Flag Link Mon Aug 20, 2007
Patti Pereyra, Real Estate Pro in Chicago, IL
MVP'08
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I read the other thread and re-read your question several times. I do not think you are using the correct method to determine value. What you need to determine a realistic offer is by looking at "comps" (comparable homes). In Florida in this day and age, you want to see what similar homes have sold for in the past 60 to 90 days. What happened a year ago is irrelevant. What a person paid for the home you are trying to buy is irrelevant.

What might be relevant in the research you are doing is finding out information so that you can make an unrealistic low offer. If one person paid $100k 10 years ago and their neighbor paid $500k last year for a similar home, you wouldn't make a $300k offer to the person that paid $500k but you might to the person that paid $100k. But you need to look at the comps to see if both homes are currently worth $300k. But your tax and history research is time wasted if the $500k person is trying to sell his home for the current market value of $400 and you are willing to pay $400k.

I would strongly advise finding a local Realtor to help you research comps, discuss market conditions and negotiate a strong offer.
Good luck,
Ruth
private real estate investor, not a real estate agent
Web Reference: http://www.oak-park-il.com
1 vote Thank Flag Link Sat Aug 18, 2007
Ruthless, Other/Just Looking in 60558
MVP'08
I assume this is the same question just answered. You may get two threads here. Sometimes one is better, as it allows the posters to reference prior discussion on the matter.
1 vote Thank Flag Link Sat Aug 18, 2007
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
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For example if the home sold for $100,000 last year and they are now asking $200,000, you know that the profit of $100,000 means that they may be more open to negotiation.
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Again, I would caution making my offer based on what I perceive to be the previous owner's profit.
0 votes Thank Flag Link Mon Aug 20, 2007
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