Home Buying in Lovettsville>Question Details

Frank, Home Buyer in Lovettsville, VA

What would you do if you like a house who is on the market for 850K and the assessed value is 645K and?

Asked by Frank, Lovettsville, VA Sat May 17, 2008

everything around the property is about 645 /-?
I checked the market area and made an offer for 650K. The listing agent came up with some comparables who are not even sold properties. He is comparing homes who have been on the market for over 1 year and who did not sell. Plus the counter back was in the low 800K.

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Jeffrey Schnabel’s answer
Frank,

The assessed value of a property, relative to the asking price, is meaningless. The vast majority of taxing entities use something called "mass appraisal", where a computer model is used to determine the value of the properties in a given area of town. It is not unheard of for a taxing entity to actually have a practice of being accurate on their assessments, but it's very, very, very rare. Again, assessed value is meaningless.

That said, what the agent provided you, according to your question, is also meaningless. Go get an agent to represent you and have them put together a market valuation for the property you're interested in. They will pull sold data for similar properties that have sold in the last 6-12 months. Sold data is the most valid determining factor for what a similar property is worth.

Best of luck,

Jeffrey
2 votes Thank Flag Link Sat May 17, 2008
I would laugh and move on to the next property. Obviously, you and everyone else around knows how to do a good job of valuing that property - unlike that seller and their agent.

Don't waste your time on this one...they're way too far off and unrealistic to even consider negotiating with them.
Web Reference: http://www.LoudounStats.com
1 vote Thank Flag Link Mon May 19, 2008
Offering a CMA of homes that are on the market in a given community is not an accurate reflection of what a similar home is worth. I provide my clients with comparable properties that have SOLD within the last 3 and 6 months. When negotiation a sales price on behalf of my clients, I present to the listing agent the offer along with the recently sold data. The seller can ask whatever they like but only the market will dictate what the home actually sells for.
0 votes Thank Flag Link Wed Nov 5, 2014
My first idea would be to buy new construction. Builders, unlike home owners, have dramatically reduced their prices. Most new construction in this price range has been reduced by about $200,000. This is my speciality and I look for new home bargains daily. Western Loudoun County offers great value for new homes. Home owners are always looking for a profit, even when the market has dropped. Builders just want to keep building.
0 votes Thank Flag Link Sun May 25, 2008
Send a letter to the neighborhood and see if you can find another seller. If the area is big enough, with over 100 homes, you should get at least 1 if not 2 replies.
0 votes Thank Flag Link Wed May 21, 2008
In this market . . . Buyers are in control and cash is King !!
If there are no competing offers on the home at this time, walk away from the table and let the Seller pursue you !!
0 votes Thank Flag Link Tue May 20, 2008
Frank,
Sounds like lots of good advice below. If you like the house, keep negotiating. If you think it's a value issue, then you can negotiate and make sure your contract provides for an appraisal that equals or exceeds your purchase price. If it doesn't, then you can walk away (provided the contract is worded correctly). Keep in mind, however, that you would be out of the price of the appraisal and home inspection (if you get one). Let us know how it turns out.

Oh, and tax assessments are usually done on a very mass scale and frequently incorrect. Case in point, a property I had at 4800 sq. ft., 4 1/2 baths, 5 bdrms was assessed at 3500 sq ft, 3 1/2 baths, 4 bdrms. The tax assessment was over $100,000 less than market value. Means less taxes!
Web Reference: http://www.tchurchwell.com
0 votes Thank Flag Link Tue May 20, 2008
Contract provision wherein the price can be adjusted to equal the actual appraised value. Assessed values often have no direct relationship to market value,
0 votes Thank Flag Link Tue May 20, 2008
Hey Frank

I have to second what Jeffrey has said. The tax assessed value is only valuable tax purposes but when it comes to the selling price of the actual house, it would not act as much more than a guidepost for prices but defiantly not an actual price. As you know, generally, even in this market, houses are selling for more than their TAV (unless they want to sell in a HURRY). So, I also second what Jeffrey said in finding a competent agent. Comparable sales data is the best way to determine how much a house should sell for apart from an appraisal. If at all possible, have your agent pull up "comps" for similar sales within the past 6 months. If he/she can't do that, pull back to a year for comps. Don't use information of houses that have sold for over a year because these don't matter to appraisers. I hope that helped.
0 votes Thank Flag Link Sun May 18, 2008
Consider this scenario: you decide to accept the seller's counter (I know you wouldn't do this, but just play along with me for a moment). Your contract includes an appraisal contingency that says that the appraisal must equal or exceed the contract sales price. If it doesn't, there are three options: the buyer can void the contract; the seller can lower the sales price to the appraised value; the buyer and seller can renegotiate the price (with the buyer probably having to increase their down payment). Of course, all of this takes time ... the seller loses marketing time while his home is off the market ... the buyer loses time and money for inspections (and the appraisal, of course). As Timothy said, you need to be willing to walk away from this one ...
Web Reference: http://www.GlendaCherry.com
0 votes Thank Flag Link Sun May 18, 2008
It would appear that either the seller isn't motivated enough to sell for what is a realistic price or their listing agent hasn't educated them about the current market and is using irrelevant data to support an incorrect sales figure. Be willing to walk away if the price isn't going to land where you will be comfortable.
0 votes Thank Flag Link Sat May 17, 2008
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