Home Buying in Lubbock>Question Details

Alayna, Other/Just Looking in Lubbock, TX

Is it ever smart to pay above the appraised price for a property - especially in this market? I've been looking at 2 houses, both in the same

Asked by Alayna, Lubbock, TX Mon Sep 28, 2009

neighborhood, 1 is priced $11,000 below the price it is appriased for (on the appraisal district's website) and the other is priced $10,000 above the appraised value. Are these prices just reflective of how badly the owner wants to sell? Are the appraisal prices on the county website usually correct? Thanks for your help!

Alayna

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The appraisal district price is tax value not market value - there is a difference!!! I really would not put too much value in the appraisal districts valuation. Most of the time they do not go out to each home and give them valuations - they use the general comps in the area. Market value is based on comps in the area, but it is more subjective looking at just about 3 or 4 homes to compare to the subject property taking into account the condition and updates and other things that affect the total value - the tax office doesn't take that kind of time or research to determine tax value! Hope this helps - but you should also find a reputable realtor to run a CMA for you on the property you are considering and let you know more about other sales in the area.
1 vote Thank Flag Link Mon Sep 28, 2009
These anwers are good. Remember too that Market Value is what someone is willing to pay for a property. Contact a realtor in your area and have him send you a CMA (comparative market analysis), this will give you the actual sales prices for homes in that area over the last 6 to 12 months. Compare homes that sold in size and amenities and you should get a really good idea what homes are worth in that neighborhood.

This is a buyers market, you are right on. Check Foreclosures and pending foreclosures in that neighborhood, and you might get an even better deal on a house. Let me know if I can help show you how to do that.

Tony Z
In The Field Training
0 votes Thank Flag Link Mon Sep 28, 2009
Please remember that the appraisal district uses bulk appraisal techniques, which are not completely accurate. On the other hand, is the appraisal given by a bank appraiser completely accurate, either?

The bulk appraisal is normally done at a desktop, not by visiting the property, although some tax appraisers actually do go out and view the exterior of the property. It is rare that they go inside to see what the amenities of the house are. So, they might appraise the same size house based on exterior dimensions and the same apparent features, when one has granite countertops and wood floors, while the other has Formica and carpet.

You can use the appraisal district values only as a rough guide, not the final answer.

The bank's appraisers, on the other hand, do go inside. The current problem with bank appraisers is FEAR. After so many bad loans were made in California, Nevada, and Florida, a lot of people blamed appraisers for overvaluing properties. So, they're afraid of having an appraisal questioned now. In some cases the bank appraiser's value is lower than the appraisal district's value -- so what is the truth?

Ask your Realtor for guidance. They know what the market is paying and can suggest an offer to make on the house. Visit both properties and see for yourself which you think is worth more. Sometimes it's a surprise to see the interior condition and wonder what the seller was thinking.
0 votes Thank Flag Link Mon Sep 28, 2009
Alayna,

The appraisal district's website may or may not be reflective of the current market value of the property. Remember that the appraisal district assesses the home ONE time a year, whereas the market value may change every month (in the current housing market we are in). So do not use the district's website as your basis of the value. Your Realtor should be able to give you comparable sales of other homes in the area and that will give you a more realistic value of what each home is worth! Hope that helps!!

Jackie
0 votes Thank Flag Link Mon Sep 28, 2009
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