Found a house and are pre-approved for a mortgage through our lender. House is listed at $139,900 but city

Asked by Julia, Milwaukee, WI Sat May 10, 2008

assessor only has it appraised at $133,900. Property has not been on the market long. Home is in FANTASTIC condition, only draw back is that it does not have a basement. Comps in the area go for around $130,000. Going to put an offer in on the property tonight but as a first time home buyer, I am not sure what to offer (in the current market state)!? Any ideas/advice. . .

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Donna & Dick…, , 53072
Wed Jul 29, 2009
An Assessor is not an appraiser, thoght he/she could also have a backgorund in appraisal. A home's value is never ever based ont he assessed value. They are never right on the nose. They are often way high or way low. As a former Tax Assessor, homes are valued int he assessment process based on a number of factors: (1) The budget for the year (2) Sales during the prior year. So, yes, if your lender has an appraiser determine if your asking price is truly the value of the property, the appraiser will review sales that occurred in the past 3 months, and as close to the home as possible. This varies depending on whether the property is located in the city or the country. In the city an appraiser will start with 3 or 4 blocks surrounding the house. In the country they might have to go a mile or even further. The appraiser also ... only compares similiar homes. Ranches to ranches, cape cods to 1-1/2 story homes, etc. MY CONCERN IS BUYING A HOUSE IN BAY VIEW WITHOUT A BASEMENT. You probably will not live in the home forever, and the resale on a house that does not have a basement (in this part of the country) is most difficult to resell. (PS there is a home at 2962 S. KK that you should look at. Not just a rehab, but completed by an interior decorator ...) email: if you want to talk to a Realtor(R).
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Joshua Bucio, , Milwaukee, WI
Mon Jul 7, 2008
Keep this in mind on the lending side of things...

For example, lets say your offer is accepted at 130k. Now, you start the lending process and the appraiser is order to go out and appraise the home. The value that comes back on the appraisal is 128k. The lender will only finance the lessor of the purchase price or the appraised value. In the years I've been helping first time home buyers with their financing, I've never seen a seller NOT understand that the purchase price has to come down to match the appraisal. Basically, you are paying more than what the appraiser believes it's worth. Whether the seller may think it's worth something else, it's the lender that determines the homes value based on a current appraisal.

Another option is to pay the difference out of your own pocket, but is that something you are willing to do?

Let me know if I can be of anymore assistance on the financing part of things.
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Karen Wenzel,…, Agent, Brookfield, WI
Sat May 10, 2008
Assessed values throughout the Milwaukee area (and beyond) have very little connection to what a property is worth to a Buyer. It is merely a way for the municipality to determine what the property is worth for taxing purposes.

I can only suggest that you have your Realtor provide you with comparable recent SOLD properties within the area of this home- Sold within the last 3-4 months. If there have been no recent solds, see what is pending. I know that there are quite a few homes that have no basements in the area, you can usually buy a basementless home for a little less than one with a basement- but you will get a little less when you sell also.
If the property meets your needs, and you are comfortable with it- by all means it is better than renting.

Depending on how motivated the Seller is (your agent may be able to find out a little more about that by talking with the listing agent) you may be able to buy it for a less- all depends on how many other people also see it as a good value. Again - your Realtor is your best source of information, hopefully you are working with them as a Buyer's Agent.
All the Best to you!
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