beware of realtors who tell you that your property is worth more than it can actually sell for, just b/c they want you to get excited and list with them. it's called "buying" a listing and many inexperienced agents do it every day. they equate a listing with a paycheck, but that's not the case at all. a listing is just the beginning.
i am a realtor who buys a lot of houses as investment properties. i tell people upfront that they may be able to get more money than i'm offering if they put it on the open market (w/ me or another realtor). however, depending on a seller's circumstances, they often take my offer b/c they know i can close quickly and buy the house as-is.

1. Are you looking to sell your home, and a Realtor coincidentally want to purchase?

2. Or, are you entertaining a guaranteed purchase that was part of the advertising promotion of a Realtor solicitng your listing?

If it is the first..........hire a Realtor to represent you as seller. Meet w/ 3 Realtors and ask them for pricing opinions and marketing plans. Look at the marketing plans, incase the original Realtor buyer does not maintain interest. Choose a respresentative that is hired to negotiate in your best interests.

If it is the second.......ask the Realtor how many properties they have actually purchased through the guaranteed sale program. If possible, speak w/ those sellers directly. The Realtors who offer this are not interested in buying your home, but rather use the promo line to secure inquiries from which to gain listing contracts. The terms to which the seller must agree are generlly very restrictive.

The tax value has nothing to do w/ market value.

Beware the wolf in sheep's clothing. The best thing you could do is to meet with several local Realtors to discuss your home's value. You could hire an independent appraiser (one that you select, not the agent) prior to any agreement on price. I bet you'll be awfully surprised at the differences in opinions of value between those who are not trying to buy your house and the one who is.

Property tax valuation has nothing to do with real market value. Get a second and third opinion as to the real value of the property. Do not let yourself be takien advantage of because of the Assessors terminology of market value on the property tax bill. That is a meaningless number as far as market value is concerned. It is only used to determine how much property tax you are required to pay each year.

They pull it out of their hat... basically.

No Realtor in their right mind will guarantee a sale in this market unless they can buy it way, way under market.

It is a ploy to get your listing.

If youre house is worthe $700,000, are you willing to sell it for $400,000?

If you are... call me.

We are not doing brain surgery here.

Sell it cheap, most anyone will buy it.

Brenda
I think you are referring to some Realtors that advertise "If I can't sell it, I'll buy it".

The basic idea is that the Realtor's guarantee is based on the seller pricing the home within a certain percentage of the market average, then if the homes does not sell, the Realtor will buy it, subject to the normal costs of doing business.

Here is an example:
If the market is stable (meaning not going up or down), the maket price would be determined by comparable istings. The Realtor agrees to purchase the property, less closing costs (escrow, title, inspecttions, etc.), less the commission, equals what he would pay you. So if the commission rate was 7%, the price would be your agreed market price, less 7%, less closing costs (estimate at 1%), so you would receive, on a net basis, the amount that you would have received if it had sold.

There are many variations on this theme. My personal perspective is that a home will sell when it's priced right. All things being equal, price and condition will sell a home every time.

The second part of this post concerns property value. I am not sure where Newport is..Oregon? Anyway, the county appraiser bases the appraised value on the last sale price, then periodic updates based on closed sales of comparable homes in the area., In most cases the appraised value is less than the market value (unless the market is going down). It is not customary for your tax records to show improvements, unless they reflect beds, baths, or other "permitted work".

Market value, appraised value for tax purposes, appraised value for financial purposes, all will vary.

Hi Brenda,

I'm not sure I understand the first part of your question: "How does it work when the realtor buys your house for market value?"

However, if you are wondering how market value will be determined when it comes time to sell your home, your Realtor will review recently "sold" comparable properties in the area, weigh various variables for each comp, and then determine a fair market value for your home.

What you paid for your home will have no bearing on what your home's true value is; only what the current market is willing to bear matters.

As for the taxes, interior improvements such as cosmetic updates (new flooring, updated kitchen, or new baths) will not impact your taxes too much. However, if you added liveable square footage (like a second story addition or a family room) or major improvements, like a swimming pool or huge deck, or even in-ground sprinklers, this will affect your assessed value and will raise your taxes. If these were improvements that required a permit, the permit is on file and the assessed value should have already risen, thereby already affecting your taxes (depending upon when these improvements were made).

Moreover, simply because the value of your home has increased over the past 5 years due to not just improvements but yearly appreciation, because property taxes are based partly on purchase price, it is likely the property taxes will rise regardless and the new owners will feel the impact.