Home Buying in 36695>Question Details

Jennifer, Home Buyer in Mobile, AL

Our house was appraised higher than the purchase price. Will we pay higher taxes?

Asked by Jennifer, Mobile, AL Tue Jun 7, 2011

Does this mean "instant equity"?

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Taxes are normally assessed when the entire town is appraised on a regular schedule and then adjusted by using a percentage of assessed value to account for market fluxuations. And the appraisal done for your bank will not be shared with the municipality, so no worries on that account. An appraisal is an opinion of value based on recent sales in the area of similar homes. Another appraiser may have a different opinion of value, however, provided the transaction closes, and other appraisers would agree with yours, you will be one of the lucky ones who enjoys 'instant equity'. Congratulations!
2 votes Thank Flag Link Tue Jun 7, 2011
Jennifer,

Cant really add to the answers below other than county assessments may occur every three years or ten years or other frenquency. You can check with your realtors or your county tax assessor office to learn how often property is reassessed where your house is.
1 vote Thank Flag Link Wed Jun 8, 2011
Hi Jennifer,

Property taxes are usually based on sales price - not appraised value. However, property taxes can be adjusted periodically by the Assessor based on market value.

Shanna Rogers
SR Realty
http://www.RealtyBySR.com
1 vote Thank Flag Link Tue Jun 7, 2011
Suzanne is right, the bank appraisal is not shared with the town, and in general the town is assessed on a completely different level. While in most markets, tax assessed value does relate in some way to sales price, in your situation you should not have to worry. You may indeed be one of the lucky ones who will enjoy instant equity - a rareity in this market!
1 vote Thank Flag Link Tue Jun 7, 2011
I suggest that you talk with the Tax Revenue office, but my hunch would be that the taxes would be based on the purchase price. The appraisal that is done for the loan does not overlap to the tax assessors office (to my knowledge). And yes, you do have "instant equity". Congratulations!
0 votes Thank Flag Link Wed Jun 8, 2011
Your first question was answered well. The second question is yes. You can quickly (depending on your finances and the type of loan) refinance the equity out (meaning it is real equity). Good job!
0 votes Thank Flag Link Wed Jun 8, 2011
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