Home Buying in 78748>Question Details

Suzanne Lewis, Home Buyer in 78745

When looking to buy a house, how should the asking price compare with what is on the tax rolls? I am looking at a house that the listing price is

Asked by Suzanne Lewis, 78745 Wed Jan 20, 2010

$175,000. TCAD assessed it for $158,000. I would like to make an offer on the house that is in between those prices. Is that acceptable?

Help the community by answering this question:


1st Zero-Emissions Realtor’s answer
Dear Dear Dear Mr. Bubble the Home Buyer,

Yikes! Your bottom line is at risk, Mr. Bubble. Please accept this as a gift from me to you:

Your Comment: - "I assume government assessors can get the same info a realtor can about recent sales... if not they can make assumptions about list prices and loan sizes. They'll be close."

(First, "they'll be close" - is this word "close" like..... within 10% close? because if you are purchasing a home 10% more than what you should, well, let's just say you could have a free car with that 10% instead of just saying "close enough".
Second, this is absolutely incorrect, and it appears you haven't ever disputed your taxes. nothing wrong with that... again, today you are receiving a gift, so what better time than now, right? Anyhow, here's the scoop... Hundreds+ homes per each assessor. Each assessor is a human, not a system, so their work ethic naturally will vary from each other. Some will get out of the car and actually walk around the home looking for added square footage, noticeable new features -windows, shed, covered patio, roof, etc, etc. And some will drive by without even getting out. Either way, when was the last time you bought a home without getting INSIDE of it? Well, "Market Value" is based on what someone is willing to pay for a home. There are 10x10 key points inside a home that will sell one home for more than the other, even if they are the exact same floorplan on the exact same street. Let's talk Appliances, Paint, Floors, Reconstructs, Counters, Hardware, Fixtures, Pop-Corn Removal, Foundation Cracks, Blinds, Designer Curtains, Crown Molding, Wood vs Vinyl vs Carpet, White vs Black vs Stainless, Rounded Corners, Vaulted Ceilings, 7 Foot Drop Downs, 8 Foot Regulars, 9 Foot, 10 Foot+, Upgraded this, Outdated that, New A/C, Old Water Heater, Staging Techniques, Odors, Smoking, Non Smoking, Pets, Previous Mold Damages, Previous Termites, Previous Murder?)
And again, all of that can be the difference in two homes that are the exact same floorplan on the same street.
The response to your comment is No, assessors do not have the same tools as Realtors do, nor the access to go inside homes, nor the time to go inside homes, nor the time/resources to compose a full quality CMA inside and out.

Your Comment: "Everyone seems to think that this non-disclosure thing helps them hide price appreciation from the tax man. It wouldn't stop me if I were them so I don't know why people think this."
(price appreciation isn't a set rate, nor is it guaranteed. In fact, you may have noticed the economy over the last four years has seen price DEpreciation. Nobody's "hiding price appreciation" from the tax man, and it appears if you were the assessor, you would be making the same inaccurate valuations. That's not an insult, in fact, it's normal out there ,so you would certainly do just fine as an assessor.)

Your Comment: "One rule of thumb...in a falling market, taxable values will be higher than market values and the inverse will be true in a rising market."
(not true my friend. sounds logical to the naked ear, but simply not true. When a market is falling year over year over year, how do you explain a 20% increase in valuation? Simple. "Tactic".)
Now, what's your tactic in order to obtain correction? Careful not to insult or upset them when you dispute your taxes, bring your detailed comps, think landscape, materials, windows, roof, interior, exterior, trees, and 100 other key points to work in your defense.

Does this help at all Mr. Bubble?
1 vote Thank Flag Link Thu Jan 21, 2010
Mrs. Lewis,

First of all, are you "The" Suzanne Lewis, artist? (seems like I've seen some work around town somewhere with at least a similar ring to it...)

Anyhow, that's a great question, and it often comes up as an initial question from all Buyer Clients. It's also a great sign that you are taking steps toward a strategic purchase and that you are aware of what overpaying for a home means to your bottom line when you sell. I say "when you sell" because the reality is, if you are financing your home and you overpay by $5,000, the difference in your mortgage payment may only be about $30 per month, however, when you go to sell the home, you will walk away from the closing table with $5,000 less than you should, simply because you overpaid by $5,000 when you purchased.

About 80% of Buyers take advantage of the services of a Real Estate Agent when they buy a home, so if (and when) you go to sell your home, most likely the Buyer will have representation from a professional who will know the True Market Value of the home (and the nature of "Market Value" will take its course with the sale of your home) But, no matter what your home sells for then, you will be walking away with $5,000 less than what you should because you should have bought it for $5,000 less than you did (in this particular example of course).

Without repeating (yet) what everyone else has said about how important it is to hire a great Real Estate Agent (REALTOR), I'll go ahead and let you know that there are a few homes out there that are actually priced well below the TCAD Appraisal Value.

For Example: one I am thinking of right now is TCAD Appraised at $189,000, however the seller is only asking $175,000. Given your purchasing strategy that you have mentioned above, would you consider this home a steal since the appraisal is $14,000 more than the asking price?

The reality is, Mrs. Lewis, market value is Market Value, and tax value is Tax Value. The two values are separate from each other (very rarely are they equal) and in fact, both require attention. After purchasing your home (no matter what price) you'll need to go make effort to get the TCAD Value dropped so you don't have to pay so much money in taxes. Doing so, also requires an effective strategy that a real estate professional can also help you handle (and yes, for free!)

You may not know this, but the City of Austin (and surroundings) were affected by the recent economic crashes and (as a result) has looked for ways to gain revenues to make up for the losses. The TCAD Appraisals in 2009 saw a dramatic increase, even when the market values of real estate were falling.

Many people do not dispute their tax values, so the City wins and captures those additional dollars.
Many people actually unsuccessfully dispute their tax values and the City wins again by capturing those additional dollars.
Some people will seek education and tools to successfully dispute their tax values. Good for them, and highly recommended!

The question is.... Are you buying one of those homes that was disputed successfully, or unsuccessfully, or not at all?

Be aware. You should now be able recognize the difference in Market Value and Tax Value. However, you will not be able to determine these 3 things: True Market Value, Top Market Value, and A Great Purchase Price for any home - without the help of a (great) Buyer's Agent.

A seller would only be lucky to have an unrepresented Buyer out there come around trying to negotiate based on the TCAD Values, and the Seller's Agent can certainly spot your vulnerability from a mile away.

Don't let me lose your interest here when I say; It appears you do not have a great Realtor representing your best interests (an assumption I've made by the nature of your question which often comes in as #10 of the 50 most common quick facts buyers discover when working with a great Realtor).

If you have an objection to having a great Realtor (Buyer's Agent) represent you in your purchase, please, do yourself a great service and mention that now so you can find out what you'll go up against out there, and how it can easily mean that you end up paying 5-15% more for your home than you should be.

If you are currently under Buyer's Representation with a real estate Agent..... hmmm.
Well, certainly demand a more strategic and educated approach.

There is so much more you should know about this process and how NOT to "get spotted from a mile away".
Feel free to reach out to me via email or with a phone call and we can discuss this in greater detail.

Also, please let me know if this helps at all.
Thank you much!

1 vote Thank Flag Link Wed Jan 20, 2010
The tax values in Texas are not the same as the sales price. Real estate sales in Texas are not required to inform the state of the actual sales price. Because of this, the tax assessor has to estimate the value of each property. As an owner you are allowed to contest that assessment regardless of what you paid for the property (thus lowering the estimated value even more).
0 votes Thank Flag Link Tue Dec 30, 2014
They are not related as the taxes is just an estimate and they have not gone inside the property and given a true inspection.

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Brad Neumann
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Phone: (855) 893-1177
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0 votes Thank Flag Link Tue Sep 23, 2014
Not related at all! Any automated valuation model (computer generated price estimate) is just that.. an estimate.

I see you have a lot of great answers already... but let me explain it this way. The tax assessor does not have access to the MLS data. However, even if they did, there are many things that add or detract value from a home. Tax assessors don't care that the house smells like a frat party. Tax assessors don't care that the home backs to a busy road. Tax assessor does not care what color the wall paper is, or that the carpet needs replaced.

Who cares about those things? Buyers! In the end, the only two people who can determine the right price for a home is the seller and the buyer. It's that magic meeting point where a seller is willing to sell - and a buyer see's the value and jumps (relative to all the other marketed properties).

Even an appraiser can't determine that sweet spot on the nose. So how could a computer or a tax assessor?

AVMs determine estimates based on data averages.
Appraisals look at structure and the past sales.
Realtors look at the current market and what buyers are demanding and estimate true price ranges.
0 votes Thank Flag Link Fri Sep 19, 2014
What does your agent think? That is who you should ask this question to. Now I will give you what I would say - The tax record has nothing to do with the true value of a home. Tax appraisals are not done the same way a Real Estate Appraisal is done. An offer should be based on a few main factors: 1) What have other homes in the area sold for in the last 6 months? Price per sft - similar buider and building style. 2) How much do you want the house? In this market this is a big factor because you probably will not even get a counter offer if you come in to low and someone will beat you to an exceptable offer. 3) In our current market your focus should be on making a fast and clean offer - have your pre-approval letter or if your paying cash, show funds availability on a document from the bank.
In Central Texas most experienced Realtors are pricing homes to sell. The days of pricing homes really high and getting low offers and meeting in the middle are over. Sellers want to sell and are encouraged to be realistic - Buyers want to buy and are doing the same.
Long story short - Dont waist your time looking at TCAD until you are doing your taxes after the purchase and are getting to take some extra write offs. Best Regards, Laura Rosales - Realtor with Premiere Team Real Estate
0 votes Thank Flag Link Fri Mar 1, 2013
I think you are making a wise move by looking in South Austin in that price range. I think 78745 and 78748 may have some of the best returns in the upcoming years....plus, it is a nice place to live.

To answer your question, the best thing you can do is have a REALTOR do a market analysis(The tax roll might be high, or it could be low), but a detailed analysis will give you a great idea on the current market value.

Please feel free to contact me if you have any additional questions or would like a detailed market analysis.

Steven Nusinow
0 votes Thank Flag Link Thu Sep 9, 2010
To be honest with you the tax roll has nothing to do with the value of a home one is trying to sell or purchase. Since Texas is a non-disclosure state, the actual selling price of a home remains confidential unless the home seller informs the county tax office what they paid. The values of homes reflected on the rolls are based on estimates and real estate trends. To make an offer on a home my suggestion would be to have a Buyer Representative work with you in dertermining an appropriate offer price, as you could end up spending more that necessary.
0 votes Thank Flag Link Thu Sep 9, 2010
Yes, there is a difference between the tax value and market value. Sometimes the tax value is close and sometimes not. You need to work with a Realtor and have him or her do a market analysis on the property to give you a better idea of what the estimated value of the property is. If you have any questions, feel free to give me a call at 512=576-1248.
Web Reference: http://www.lorihuey.com
0 votes Thank Flag Link Thu Feb 18, 2010
Well, this is one theory in real estate that can actually be tested.

Like I say, you can test whether the assessor is accurate by looking at recent sales, their prices, and their assessed value.

If they're close, well, then, they're close. If they're not, well, then, you know you can't rely on them to determine fair market value.

Should take about five minutes, seven if you're doing it while sipping coffee.
0 votes Thank Flag Link Thu Jan 21, 2010
Be careful with that assumption. We can pull up one specific home, then compare it to like homes in the same neighborhood, and we'll find tax values all over the board. Some people protest their taxes, while others let them ride. If a home fell into foreclosure at some point and sold low, the new owner may have filed a protest to restart the tax valuation based upon what they paid for the house. If the home is currently owned by a senior citizen, it might have a Senior Exemption on the tax rolls. Same with disabled Veteran exemptions. One owner may have filed for Texas Homestead and another hasn't.

The best resource for the actual market value of a home in Texas is the 60-90 day comparative market sales figures. There can be a tremendous difference between the tax value of a home and the actual market value of a home. In other cases, the tax value is a spot on match to the market value.

My philosophy is to know the tax value, ask questions about the tax value if it's way off from the comparative sales, but to keep the comparative sales as the most acceptable valuation for resale purposes. Have your agent run comps for comparison, and you'll know for certain if you are issuing a reasonable offer or you run the risk of getting no response from the seller to a low offer.

Have a blessed day!

Ronda Allen, Realtor and C.P.M.
CEO of comingsoonhomes.com
RE/MAX Dallas Suburbs
0 votes Thank Flag Link Thu Jan 21, 2010
It seem to me that the government assessment of annual value is as good and objective as any other source of information about our property. The adversarial process whereby the government tries to get a high value and the homeowner tries to get a low value would seem to work. I assume goverment assessors can get the same info a realtor can about recent sales... if not they can make assumptions about list prices and loan sizes. They'll be close.

Everyone seems to think that this non-disclosure thing helps them hide price appreciation from the tax man. It wouldn't stop me if I were them so I don't know why people think this.

One rule of thumb...in a falling market, taxable values will be higher than market values and the inverse will be true in a rising market.
0 votes Thank Flag Link Wed Jan 20, 2010
Tax roll and market price in my opinion rarely have anything to do with each other. Of course the tax authorities might tell you something different. I see tax values way lower than market prices and much higher than market prices. They in no way determine if you are paying too much or getting a good deal.

Your realtor should be able to advise you on what has sold in the neighborhood to get an idea of prices.
Web Reference: http://www.teamlynn.com
0 votes Thank Flag Link Wed Jan 20, 2010
Bruce Lynn, Real Estate Pro in Coppell, TX
Hi Suzanne,

As most of these answers already say, you should definitely have your Realtor run the comparative numbers for the home to see what similiar homes in the neighborhood have sold for. You also want to look at how long the home has been on the market as well as how much the seller owes, to make sure they have room to negotiate. Sometimes sellers have taken out second mortgages, and just can't negotiate with you, but hope fully that won't be the case. There are many considerations when determining what price to offer on a home. A knowledgable and thourogh Buyer's Rep. Agent will be your best bet in helping with this.

Best wishes,

Pamela Peck
Keller Williams Realty
0 votes Thank Flag Link Wed Jan 20, 2010
The taxable value and market value can be completely different. My advice is to have a Realtor do a Comprenhensive Market Analysis comparing this home's features,size, age, etc. to other similar homes that have sold in the last 6-12 months. This will allow you to determine what you think is fair market value and decide on your negotiating strategies.

Incidentally, I purchased a home in 78745 and the taxable value was far below the market value. Always be prepared for the taxable value to someday reach the market value with regard to paying property taxes. This will help with your monthly budget.
0 votes Thank Flag Link Wed Jan 20, 2010
If the tax value and the market value are close; it is purely an accident. They can be way off either way and normally are. Have your agent provide you recent sales that are comparable to the home your considering so you can determine the real market value.
0 votes Thank Flag Link Wed Jan 20, 2010

Hope you are working with a realtor who can explain the difference for this specific area and give you more information about the area homes. This situation is very common and always have been asked. Consult with your Realtor and review CMA for this area. Make sure that You and your Realtor are comfortable what you are offering with acceptable terms. Everything is negotiable in real estate business.

Wishing you the best and Good Luck :)

0 votes Thank Flag Link Wed Jan 20, 2010
This is a great question and a qualified Realtor working on your behalf can help. Looking at the tax record is one of about a half dozen things I review with my clients before we make an offer. The tax record is the least helpful.
If you are looking at a home that is listed by a Realtor on behalf of the seller here are a couple things you need to know. 1) The listing agent works for and in the best interest of the seller, NOT you. If they choose to answer your questions they must be honest, however many will just not answer your question saying they don't know the answer. 2) The listing agent has negotiated a commission up front. As Realtors we have an agreement to split the commission in a predetermined fashion. Our service to you is at the sellers expense. Free to you is a pretty good price.

0 votes Thank Flag Link Wed Jan 20, 2010
Sure, it's accept-able, but it might not be accept-ed.

The asking price should have very little to do with the tax assessor's valuation of the property. The way to test this is to look at recent sales in the neighborhood, and see what the tax assessor thought beforehand. I think you'll find a great deal of disparity in the two sets of numbers.
0 votes Thank Flag Link Wed Jan 20, 2010
Suzanne, as both a Broker and investor in south side single family homes, I can honestly say I never concern myself with taxable value when determining market value. The discrepancies are tremendous, so don't worry about tax values.

If the home you're considering is a good buy in 78748, it likely won't be on the market long. The south side of town is "HOT" so figure out what offer you're comfortable with based on comparable sales, then MAKE THE OFFER! There's no way anyone here can honestly tell you what to offer unless they have seen the home.

Guy E. Gimenez ABR, CRS, GRI
Broker / Investor
The PowerHouse Group
Web Reference: http://www.phgbrokers.com
0 votes Thank Flag Link Wed Jan 20, 2010
Making an offer that you honestly believe is the right price is always acceptable, though it may insult the current owner. You should consider this if you really want the house and would be willing to pay more. Lowballing to find out how far the other side will compromise can become a poor strategy if the sellers dig in their heels because they are mad at you.

As for your question about the county appraised price v. the asking price I would caution that in many areas the county's appraisal for tax purposes bears little resemblance to the market value of the home. This varies from area to area of course.

Assuming you have a real estate agent, this would be a good time to ask for a comparative market analysis, which should give you a much better idea about what the house is really worth.

Ron Rovtar
Boulder CO
0 votes Thank Flag Link Wed Jan 20, 2010
Yes that is acceptable. You may get the home for that price or open the door for dialogue to work the deal in your favor. They may be very motivated to sell, who knows. Do you know the market value for the home? Not tax value. The reason why I ask is I have always viewed market value and tax value as two different issues. Good luck and happy hunting!
0 votes Thank Flag Link Wed Jan 20, 2010
Hi Suzanne,
The TCAD assessed price is not necessarily market value but then again neither necessarily is the list price. Realtors have the ability to run historical sales numbers in an area which would be a much better indication of market value for the home. I recently helped two client buy homes in 78748 & know the area and market values very well. If you're not currently working with another Realtor I'd be happy to help you assess a good market value for this particular home.

Feel free to call or email me anytime.

Best regards,
Rob Albertson
Austin Fine Properties
512.653.8939 c
0 votes Thank Flag Link Wed Jan 20, 2010
I'd be happy to go over the difference with you in detail as I get asked that very question many times by clients. Feel free to call or email me.

Gregg Klar
0 votes Thank Flag Link Wed Jan 20, 2010
I agree with Hillary.
You should make an offer that you are comfortable with. Have your agent look at other homes that have sold in the area.
Then make an offer.
Good luck.
Another other questions please ask.
Thank you.
0 votes Thank Flag Link Wed Jan 20, 2010
My suggestion to you is to make an offer. Whether the seller accepts, counteroffers or rejects it is another story. If you are not currently working with a Realtor, I suggest that you do for the negotiation process amongst other things. Please let me know if I can be of anymore help, good luck with your purchase!

Hillary Bernstein
Dawn Krantz-Private Label Realty
0 votes Thank Flag Link Wed Jan 20, 2010
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