Home Buying in 75062>Question Details

Sam, Home Buyer in 75062

What should be considered when purchasing a lot to build a house? The appraisal value is less than 1/3 of the asking price.

Asked by Sam, 75062 Sat Aug 28, 2010

I understand that tax appraisals will typically come in lower than the asking price, but when you are asking more than 3 times what you pay taxes on? Is this typical? I've researched the appraisals for the last 12 years for this property as well as others in the area.

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4
Typically no, 3 times as much as the taxable value does seem high. It all depends on the location of the lot.
If I'm correct 75062 is Irving. So is the location of the lot appreciating or depreciating? That is what you ask
yourself and is it worth it to you.
1 vote Thank Flag Link Sat Aug 28, 2010
This is a very legitimate question. From a statistics perspective you want to acquire the lot and build the house for less than market value. One place to start is with the value of a new or newer similar size home in the neighborhood you want to purchase the lot in. For example, if you want to build a 2,500 square foot house and the value of a newer home that size in that neighborhood is $120 a square foot then how much per square foot will it costs you to have your's built? If you can have one built for $90 a square foot that's approximately $225,000. In this scenario the logical price to pay for the lot is less than $75,000 since $225k+$75k =$300k or $120 a square foot. The farther below $75k you can get the lot for, the better for you.
As Lynn states, without more specific details there are only vague answers. If your buyers agent is experienced in this type of real estate you are in good hands, if not I will gladly be of service. Best of luck, Sam!
0 votes Thank Flag Link Wed Sep 8, 2010
Improvements to a lot are often not captured in tax appraisal data. These improvements may be the utilities in a neighborhood that have yet to be finalized to the lot or they can just be considered local amenities, such as streets, curbs and sewers or nearby parks and other facilities.

Once the value of farm land converted to residential lots has been established, the appraisal may not change over time and thus become lower than its true value. However, appraisers have been under a lot of pressure to give extremely conservative values, because they do not want a regulator coming back to them and claiming they committed an error, intentional or unintentional.

Ask your Realtor for some guidance on whether the price asked for the lot is reasonable or not. You can also check values in an area with a simple on-line tool such as http://www.DallasHomeValueReport.info
0 votes Thank Flag Link Thu Sep 2, 2010
Your buyers agent person has more data direct all your questions to ? There is not enough info. from your posted question provide a professional opinion.

Lynn911.com
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Sat Aug 28, 2010
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