Home Buying in Sarasota>Question Details

FutureHomeBu…, Home Buyer in Sarasota, FL

Why is the Just (Market) Value usually lower than the typical listing price? Should we base our offer on the Just (Market) Value or asking price?

Asked by FutureHomeBuyer, Sarasota, FL Wed Apr 6, 2011

(this is not a short sale or foreclosure home)

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Good evening!

The just market value is typically lower than the actual market value in order to account for the costs of the sale. If you're interested in determining what the home is actually worth, the best thing to do is ignore both the tax assessment and the listing price altogether.

In most cases, the county assessor has never even visited the property and therefore can't accurately determine the value; their value is determined by calculating aggregate values and then working backwards based on recorded features (bedrooms, bathrooms, square feet, etc.) Their system ignores the features that can either add or detract from values.

On a side note, online valuation tools on national websites use the same data and are horribly inaccurate. One major player, for instance, discloses that their own estimates on homes in our county are within 20% of the actual value 50% of the time. That's horrible math!

The listing price, of course, is set by the seller - and that's someone who has a vested interest in getting as much money as possible for their home.

The only reliable method for estimating a home's value, and therefore determining a purchase price, is to actually compare the home side by side with other comparable homes that have recently sold. Adjustments must be made on an individual basis based on common sense and historical data. This is a labor intensive process, but it's where a good agent will really shine!



Alex Krumm
Re/Max Alliance Group
Broker Associate
GRI, Certified Distressed Property Expert

941-234-3597 Direct
941-954-5454 Office
941-341-0192 Fax

alex.krumm@verizon.net
http://www.sarasotapropertygroup.com
5 votes Thank Flag Link Wed Apr 6, 2011
Future,

Your question is a good one...one that has lingered in the real estate world for many years. The reality of "just market" value is that it has very little to do with the actual current value of a home. As stated previously, it is a department of taxation number that is used for the purpose of establishing a basis fo taxation. It is a number that is typically not a good reflection of the home's value in the real estate market.

Today's buyers should disregard this information when buying and use comparisons for similar property sale in your local market. This is a process that an appraiser would use to establish a value for a home and ine most real estate agents can perform as a CMS (comparative market analysis).

Great attentin should be paid the the market value of a home because for financed homes that do not appraise for the sale price, lenders will shy away from offering financing for the property. As a buyer it's imparative to have a close appreciation for a home's value.

Working with an experienced agent will help you not only help you identify value but insure you can obtain the home of your choice.

Good luck,

Bill
1 vote Thank Flag Link Wed Apr 6, 2011
The Tax Assessor in Sarasota County is an elected position. When he ran, the mood in the county was that properties were being assessed too high (this was during the "boom"). People were seeing their property taxes rise rapidly.

As a result, this candidate vowed to bring the assessments down. And he has! People in Sarasota County have seen their property taxes drop 15-25% in the past couple years.

But in doing so, he has gone a bit too far the other way. True market value is above the tax assessor's market value in 90% of the cases. In some areas, like Longboat and Siesta Key, properties typically sell for 20-40% above the assessed "market value".

So I would have your realtor do a market analysis of the particular area you are looking in. But don't be surprised if he or she comes back with a suggested offer price that is over the assessed value. If you want to get the home or condo, you will probably need to go higher than the tax value!
1 vote Thank Flag Link Wed Apr 6, 2011
Dear Future Home Buyer,

The Tax Assessor in Sarasota County, typically tries to assess at 88-90% of Value to allow for discounts to the price, commissions, and documentary stamps paid by the seller.

Tim Field
Broker-Associate, REALTOR
Michael Saunders & Company
440 Gulf of Mexico Drive, Longboat Key Fl 34228
941.350.0332.
http://www.TimField.MichaelSaunders.com
1 vote Thank Flag Link Wed Apr 6, 2011
I'm not in Sarasota but a ballpark figure in Tampa Bay is the county appraiser's value runs about 80% of true market value. Of course the appraiser's office may not know if the seller laid down high end cherry hardwood floors, updated the kitchen with a $50k upgrade or made other improvements not requiring permitting on the interior but it will give you a good "ballpark" figure. Zillow also does a pretty good job of ballparking values for a neighborhood. You do NOT want to buy a house that is "overimproved" for the neighborhood because those "upgrades" will be discounted if the neighborhod doesn't support the high end finishes.

And... Short Sale and Foreclosures WILL be used by the licensed appraiser that ultimately determines the market value for your lender (if you're getting a mortgage) so you MUST use those as comparables when determining what the house is worth.

Hope this helps.

Alma
Tampa
0 votes Thank Flag Link Thu Apr 28, 2011
Hi Marie,

Great answer.

Just wanted to say hello and hopefully get some to time to sit down with you when I am on Cape Cod this August.

Hope all is well,
Terri

Teresa M. Fellows
Broker/Associate
Waterside Realty LLC
941-350-4297
tmf4257@mac.com
http://www.floridawestproperties.com
0 votes Thank Flag Link Wed Apr 13, 2011
A house is worth what a Buyer is willing to pay. That being said, you want to offer Fair Market Value, so you don't insult the Seller. Have your agent do a full CMA on the property which will show you the Active (competition), Pending & sold properties. This will give you a an idea of what to offer. Good luck!
The Marie Souza Team
Cape Cod Real Estate Services
Phone: 508-790-2000
info@mariesouzateam.com
Web Reference: http://www.mariesouza.com/
0 votes Thank Flag Link Thu Apr 7, 2011
There are some great answers here! Asking prices are usually set by the seller- hopefully based on current market conditions. In most cases a bit of wiggle room is added in and the marketing costs in order to sell as well. It all boils down to what a ready, willing and able buyer will pay. Not just or market value nor asking or list price.

Miami Beach Real Estate Guy
0 votes Thank Flag Link Wed Apr 6, 2011
I agree with Alex Krumm. Dead on and I could not have said it better myself.

BRIAN A. MCGREEVY
Broker/Owner, REALTOR, MBA, GRI, RRS, ABR, AHWD
2007, 2008, 2009, 2010 & 2011 Best in Client Satisfaction
Five Star Award Winner
Sarasota Home Realty
2100 Constitution Boulevard
Sarasota, FL 34231

Website: http://www.SarasotaHomeRealty.com
E-mail: SarasotaReal@gmail.com
Phone: (941) 544-6763 FAX: (941) 866-7588
0 votes Thank Flag Link Wed Apr 6, 2011
Hello,
You would not believe how often I get this question! I have had many buyers wanting to base their offer on the tax "ADJUSTED" market value. An this is how I explain it. Instead of "just" market value, think of it in terms of "Adjusted" market vale. The value of the home has been adjusted downward to make the tax burden less onerous. The "adjusted" value has nothing to do with the true sales or the bank appraised value.

One should NOT base an offer on the "adjusted" market value. Instead use your Realtor to provide you with current sold comparables within a mile of the home, within the past three months, of like or similar properties. Good luck and have fun shopping in the exciting real estate market!
0 votes Thank Flag Link Wed Apr 6, 2011
Just market value is computed as of January first of the tax year by
0 votes Thank Flag Link Wed Apr 6, 2011
Offer should be based on Market Value and comparable recent sales in the community. Taxable Value is usually only 80% of actual value, but taxable value is not market value. You need also take in consideration the condition of the property. Homes in good condition usually sell above asking value in a multiple offer situation.

Tony Vega
Charles Rutenberg Realty
0 votes Thank Flag Link Wed Apr 6, 2011
Future

Just (Market) Value reflects sales as of a cut-off date so that communities can assess property taxes.

However, sales continue after that cut-off date as the market continues to operate. If previous values reflect lady year, it could hurt your efforts to buy.

Your agent will prepare a sheet of comps based upon similar homes with similar amenities in close proximity and sold within the last 3 months if they are any good at all.

That's what you base your offer on.

Good Luck

Kevin Cloutiet, Realtor
Southern Premier Realty
Cape Coral, FL 34914
239-246-6639
0 votes Thank Flag Link Wed Apr 6, 2011
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