Home Buying in 53044>Question Details

keegandaley, Home Buyer in Kohler, WI

First time home buyer. I dont understand how a property can be assessed at $367,300 yet the asking price is $425,000. Am I missing something?

Asked by keegandaley, Kohler, WI Sun Feb 26, 2012

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LISTING PRICE
Understand that the LISTING PRICE has one primary objective, to attract attention: It is not intended to be set in stone, and in many cases it is not even a good guideline toward the SELLING PRICE.

Some Sellers believe that by setting the LISTING PRICE high, they can always come down, and people will make an offer anyway: WRONG! Buyers will just bypass the property and look at houses that are within their price range. And six months from now, the Seller will slowly start lowering the PRICE, (this is called “chasing the curve”) and Buyers will be asking the question; “What’s wrong with that house?” and “Why has it been on the Market so long?”

Other Sellers set the LISTING PRICE low, to attract multiple offers. (The correct strategy.) We are asked; “Aren’t you obligated to sell at this price if someone offers it?” The answer is probably not; for that to happen, you would first have to have only one offer, and secondly, the offer would have be exactly the same, down to the smallest detail, (please discuss this with your Realtor).
Another thought; Buyer will search for potential properties by groups; for example, $400,000 to $450,000, and $250,000 to $300,000. If your house is priced at $460,000 or $310,000, the Buyers will never see it. (something else to discuss with your Agent.)

Different Banks have different philosophies about pricing their properties: You cannot draw any conclusions without a good analysis.

Have your Realtor do a CMA, (Comparative Market Analysis) to help you determine your Offering Price. It is the surest way to determine the Market Value of the property.
1 vote Thank Flag Link Mon Feb 27, 2012
A Home's assessed Value is a Tax value. It is not the same as a purchase price value which is based on current market conditions in the local area. Kohler homes traditionally sell for more due to many factors. You have heard Location Location Location in the case of the Village of Kohler it is a very good location. Great school District and many community perks that make it a community people love to live in and keeps home values high.
0 votes Thank Flag Link Mon Jan 28, 2013
Wow, this is a very consistent topic and reflective of the confusion that exists when using similar wording.
In Pinellas County Florida, the public records show Assessed Value and Just Market Value. They typically display the same number. It would be easy to assume Just Market Value has something to do with the Market Value. Sigh...we are dealing with government bureaucratic thinking. Transparent public service is not the goal. This, by their own definition has no relevance to selling price except that by accident the titles contain the word, market.

Now, if the home in which you have interest is in a community of identical homes and more than three a month are selling, there is a greater expectation of accuracy. However, you will likely observe that the data will need to age more than 60 days to be assured ALL the sales are included in the statistics. Most banks will only accept data from the last 90 days...so you can easily see a quite difficult situation exists for a citizen to get timely, actionable data. In essence, much of the data of the past 60 days may be missing. YOu will need to read that wall of text to know what the posting time is for your assessors office.

Now, would I be correct to assume you have NOT read Truilia's disclaimer regarding their 'estimate." How about the disclaimer on Zillow for their 'Guesstimate?" Well, how about all the text on the first page of the Tax Assessors website that explains how this data is calculated, and detailing what is included and especially what is excluded in these numbers.

We have two adjacent counties here in the Tampa BAy area with a field call 'Just Market Value" that have a built in 15% bias. If you don't read and keep track of the location, you will be really guessing with the help of ones hard earned tax dollars. Why they don't simply use Tax Assessed Value and Adjusted Tax Assessed Value is beyond my explanation.

There is a way to leverage assessed value or just market value in a meaningful way. This is needed in areas where there are few sales and few comps. This method is typically a component of the three column value validation process referred to as List Price Analysis. Your real estate professional can share this with you.

The moral to the story is, Actual Market Value is reflected in what the market (a willing seller and willing buyer) dictate the values are. That is shown ONLY in Sold Price data. Avoiding consulting with a real estate professional or at the very least using the tools they can provide only serves in self deception. You simply are not getting relevant, real, accurate and timely data.

This is a real battle professionals face daily. Even appraisers fall victim to this plot and imposed requirements of the bank. The willing buyer and willing seller are the only real measure. Quite often, reality is observed by the buyer bringing extra funds to the closing table. And it all started with misinformation that too many people repeated.

Now, if the assessed value for this WiSCONSIN property is calculated the same way it is in Pineallas County Florida, the numbers you displayed in your question are EXACTLY correct. YOU need to read the explanation regarding how the tax assessed value is calculated. Then you will know EXACTLY where the $425 come from. The intent (goal) may be that the tax assessed value is the value of the house MINUS the costs for buying and selling the real estate, typically 15%. These goals in the volatile real estate market in Florida are frequently 40% off target.
Web Reference: http://www.MyDunedin.com
0 votes Thank Flag Link Mon Feb 27, 2012
kee.....

This is one of the many services provided by a realtor. Working with an experienced local real estate professional should provide you with an accurate appreciation for the market in which your target home is located.

The best offers are those that can be justified and defended through the use of comparison information. Understanding the current market price point and factoring in variables such as location, condition of the home, age etc. may be a much more rewarding approach than seeking generalizations and guess work.

Good luck,

Bill
0 votes Thank Flag Link Mon Feb 27, 2012
It sounds to me like you are not working closely with a Realtor, that is a very big mistake. Find a Realtor you trust and follow their lead, good luck,
0 votes Thank Flag Link Mon Feb 27, 2012
The assessed value really has nothing to do with the current market value of a home. It is a method for the town tax assessor to determine the tax burden for each property based on homes of similar square footage within a geographic location. If the town was just reassessed then I would say it is reflective, but it is rare. I would suggest that when you find a house you are interested in making an offer on, have your realtor do a comparable market analysis of recently sold homes that are similar and make an offer that sounds fair and that you are comfortable with.
0 votes Thank Flag Link Mon Feb 27, 2012
Thank you so much for your responses. Say if a house is assessed for 367k and the avg price of a similar home in the area is significantly lower, is it fair to say the asking price 425k is too much? What would be a fair negotiation ratio if any?
0 votes Thank Flag Link Sun Feb 26, 2012
Home values in Kohler are hard to gage as so many factors need to be considered, The school district and area does make these homes worth more than say a identical home 5 or 10 minutes away in Sheboygan... Agents who live in Kohler as I do and work this area all the time can help explain why prices are higher. Just give me a call anytime!
Flag Sun Jul 15, 2012
kee,

This is a most often misunderstood issue.....one of confusing appraised value and assessed value. Appraised value is the value of a home based on the sale of similar homes in the present RE market. While an assessed value is strictly a number assigned by the local tax department that helps them to generate the annual tax assessments. It has no relevance to the value of the home. Typically the assessed value will be lower than the actual value of a home.

Hope this is helpful.

Bill
0 votes Thank Flag Link Sun Feb 26, 2012
Keep in mind that assessed value really has no bearing on market value; therefore in order to determine a fair offer, review comps with your agent, recently sold similar properties in the immediate area, see what the data suggests and go from there. Assessed is the value placed on a property by the local tax assessor's office for the purpose of taxation.
0 votes Thank Flag Link Sun Feb 26, 2012
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