Good initial offer?

Asked by Sean Dunham, Tampa, FL Wed Jan 9, 2013

If a homes assessed value from last year was $75,000 ($20,000 for the land and $55,000 for the improvements) and it was selling for double the assessed value ($145,000), what would be a good initial offer? I realize that assessed values are (almost) always significantly lower than market value, but I am asking because I would not want to submit an offer with an embarassingly low amount? Would say, $120,000 be a good offer in the Tampa Seminole Heights area or is that too low? The average price for similar homes in that neighborhood is $120,000, FYI.

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Robert Adams’ answer
Robert Adams, Agent, Tampa, FL
Sun Jan 13, 2013
Hi Sean,

There are some good answers regarding assessed value compared to market value. Have you been inside the house? While the pictures of the listing look great, the feel of the layout may influence your decisions on your value.

I agree with the direction of comments where assessed value does not always correlate with an individual house: I do glance at assessed value to make sure a listing price is in the ballpark for the neighborhood, and what other buyers have paid relative to the market value, though that value from the appraiser's office does not reflect current condition, especially with a house recently improved. Each home is unique, especially in that neighborhood, and especially when homes can be older with a variety of upgrades, or lack thereof.

The best approach would be obtaining more information about what other buyers have paid for similar homes nearby, homes that are in similar condition, size and with similar amenities. Work with a Realtor so a greater understanding can be achieved of the current pricing in the neighborhood.

Then, with the understanding that the true market value is determined by the lowest price a seller will sell and the highest price a buyer is willing to buy in an arms length transaction, negotiate for the best position for yourself that the seller will sell for.

Good luck to you!
0 votes
Lynn Brock, Agent, Sarasota, FL
Thu Jan 10, 2013
Sean Dunham, computing an offer based upon the assessed value isnot a true method. The market value of a property would be based upon recent comps (sold last 30 days) two from the subdivision and at least one from outside the subdivision in similar condition.

The condition of the property, market demand and recent solds/sqft would be most accurate. Work with your agent to determine an offer price.

There are many many negotiating strategies regarding submitting an offer. Best to work with an experienced agent in submitting an offer.

Best regards,

Lynn Brock
Brock Realty Inc.
0 votes
Annette Law…, Agent, Palm Harbor, FL
Thu Jan 10, 2013
Lets take a community called Barrington Hills.
Homes have SOLD in Barrington Hills in the past six months between 1.2 and 1.8 of assessed value.
In eclectic communities you will see this pattern repeated predictably..
In communities of homogeneous housing, such as Forest Hills, the range will be within 15%.
Your approach is fatally flawed.

Here though is the only word of advise you need to accept....
"Until you ask the answer is always NO!"
Know the parameters that work for you. Hire a good negotiator. Then make an offer.

Best of success to you,
Annette Lawrence, Broker/Associate
Remax Realtec Group
Palm Harbor FL
0 votes
Bill Eckler, Agent, Venice, FL
Thu Jan 10, 2013
Hi Sean,

Trying to wrap a home's assessed value into a purchase offer is not a realistic approach. Since "assessed values" are the creation of the local munucipality for the purposes of establishing taxes, they can be considered as being far removed from a home's actual value.

It sounds like you have done some research and have a basic understanding of the market values in your targeted area. If you are seriously interested in presenting an offer that will help you arrive at an number that is fair to both you and the seller, you would benefit from the services of a local real estate professional that is familiar with this community. Making a good offer goes far beyond arriving at the "average number" in a location. Home should be compared based on age, condition, size, recent sales, etc. prior to arriving at a number.

Good luck,

0 votes
Lisa Lowe, Agent, Belleair, FL
Wed Jan 9, 2013
Recent home sales in this neighborhood vary greatly depending upon the size & condition of the home. Significant improvements have been made to this home in the past few months. You've done some research and are in the ballpark of the 'average' home values. The only way you'll know if the Seller will accept your offer is to put it in writing - include a current pre-approval letter, request a quick response from the Seller and have a professional home inspector at the ready. Hope you succeed in reaching your home ownership goal!
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Jenn Cook, Agent, Tampa, FL
Wed Jan 9, 2013
Give me a call 813-810-7454 and let's write it up!! :-) It doesn't sound like an unrealistic starting offer at all, but be prepared to negotiate.
0 votes
Ron Thomas, Agent, Fresno, CA
Wed Jan 9, 2013
You want us to agree with you;
You don't want to hear anything different.
Being right is more important than buying the house.
0 votes
Jeanne Gleas…, Agent, Apollo Beach, FL
Wed Jan 9, 2013
If you are seriously interested in this home, you should hire a realtor fast! Homes in this price range do not last long! You should make your best offer and not waste time on counteroffers. It appears that all the remodeling has been done since last August. Make your offer contingent upon an inspection, ask for a home warranty, all appliances and some closing costs to justify a higher offer.
0 votes
Tim Moore, Agent, Kitty Hawk, NC
Wed Jan 9, 2013
First of all assessed values have NOTHING to do with what the house should sell for. It could be a benchmark to go by, but it has nothing to do with it's sale value. Here, in NC, the assessed values change between 4-8 years and remain the same for years. I am not sure what Florida does, but home sale prices can be over, at or under the assessed value which is set to tax similar homes similarly to each other. They do not take into account what is in the house at all so two could be next to each other and assessed the same while one is gutted out and the other upgraded to the max. You need to find a Realtor who can show you what comparable homes have sold for and base you offer on that, not a tax assessment.
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