Question Details

Natalia, Home Buyer in Kenosha, WI

What is normal ratio between asking price and assessed price?

Asked by Natalia, Kenosha, WI Wed Oct 31, 2012

I am looking to buy a house in Satasota/Bradenton/Naple/
I found agent and he send list.
Q: Is it normal ratio between asking price and assessed price? Ratio is almost 2:1 (!!!)
Here is examples: (Naples)
Asking $99,000 (681 10th Ave NE) assessed Value $68,315
Asking $119,900 (640 16th St SE) assessed value $56,173
115,000 (3740 18th Ave NE) assessed $49,833
I need house with some land to garden space... NOT major repairs, HOA fee, intersections, huge insurance...

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Answers

5
Lisa Darragh’s answer
When a home is assessed, it is done by square footage, prior sales and the look of a home on the outside. Assessors normally do not go into homes. When we determine a homes "Market Value" we look at the inside of a home, average price per square foot, neighborhood comps vs. a wide area of solds. Market value gives a more precise value to the home. Assessed value can be based on too little information on the home. When you go through the buying process, your agent will have a better sense as to market value. Also, the bank will do an appraisal on the property. One of the protections you should add in you offer, especially when one is putting a substantial down payment, always add that the home must appraise at purchase price.
2 votes Thank Flag Link Sun Dec 9, 2012
As Allan said; forget about ASSESSES Value; it is meaningless for our purposes.
Concentrate on the MARKET VALUE:

LISTING PRICE
Understand that the LISTING PRICE has one primary objective, to attract attention: It is not intended to be set in stone, and in many cases it is not even a good guideline toward the SELLING PRICE.
Some Sellers believe that by setting the LISTING PRICE high, they can always come down, and people will make an offer anyway: WRONG! Buyers will just bypass the property and look at houses that are within their price range. And six months from now, the Seller will slowly start lowering the PRICE, (this is called “chasing the curve”) and Buyers will be asking the question; “What’s wrong with that house?” and “Why has it been on the Market so long?”
Other Sellers set the LISTING PRICE low, to attract multiple offers. (The correct strategy.) We are asked; “Aren’t you obligated to sell at this price if someone offers it?” The answer is probably not; for that to happen, you would first have to have only one offer, and secondly, the offer would have be exactly the same, down to the smallest detail, (please discuss this with your Realtor).
Another thought; Buyer will search for potential properties by groups; for example, $400,000 to $450,000, and $250,000 to $300,000. If your house is priced at $460,000 or $310,000, the Buyers will never see it. (something else to discuss with your Agent.)
Different Banks have different philosophies about pricing their properties: You cannot draw any conclusions without a good analysis.
Have your Realtor do a CMA, (Comparative Market Analysis) to help you determine your Offering Price. It is the surest way to determine the Market Value of the property.
1 vote Thank Flag Link Wed Oct 31, 2012
Wow! So many factors!!! You message is a subject to study :) Thanks!
Flag Wed Oct 31, 2012
You can get yourself into trouble by focusing upon assessed value. Within certain localities, there may be some value in knowing assessed value, but far more often you are just misled. I have seen property assessed at what is called "100% of market value" sell for something close to that figure. BUT, 60% of the time it goes considerably higher and 30% of the time it is lower. Often these figures are way off from each other.

The assessed value is for tax purposes. It has a direct relationship to what you pay for property taxes. Often assessors are not terribly interested in what it may be worth in the market place. Instead, you need to decide one thing: What is it worth to you? And offer accordingly.
0 votes Thank Flag Link Sat Dec 15, 2012
List or asking price is set depending on the pricing strategy selected by the seller and his agent.

Underprice, and you attract more attention, and possibly stimulate multiple offers at over list price

Overprice, and you may not get anyone to see the property.....but some overprice because they anticipate that a buyer will haggle.

Some prices are set to reflect the condition of the house -- for example, a fixer upper/handyman specialy may be priced less than comparable homes in the immediate vicinity

Forget about assessments --- some of these assessments are historically based on what the owner bought it for years ago, NOT for what it will sell for today.

If you are looking to buy -- engage a realtor to help you. You'll find a lot of helpful agents on this forum in your selected area who will be most happy and willing to help you.
0 votes Thank Flag Link Sat Dec 15, 2012
Assessments in this area have no bearing on actual value. A home here can be assessed for $160,000 and worth over $500,000.
0 votes Thank Flag Link Wed Oct 31, 2012
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