We are in the process of buying a townhouse. It appraised for 150k (contract is for 114K) will this make our taxes higher?

Asked by Krbucklin, Beech Island, SC Sat Jul 16, 2011

Also, we have a feeling that this person didn't even go into the townhouse because they put that it is a 1.5 bathroom when it's actually a 2.5 bathroom townhouse. How can you miss a bathroom that is huge? I'm not kidding you can't miss this bathroom. It's in your face as soon as you walk up the stairs. Also, the townhouse doesn't have the appliances in it yet(we get to choose those and pick them out) but they put that it did indeed have all the appliances in it. This makes me very skeptical at this point and at a loss as to what to do. Any advice would be greatly appreciated. So with the appraisal being so much higher then the offer will that make our taxes more and should we dispute the appraisal when it is so clearly wrong? Also, the comps he used are not even close to what our house is he "supposedly" couldn't drive down the street and look at other townhouses he had to use the single detached home right there in the neighborhood. I think he was just lazy.

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11
Brandon L. B…, Agent, Midway, GA
Sat Jul 16, 2011
BEST ANSWER
No, the appraisal that was performed has absolutely no connection to your property tax value. In fact, your purchase below market value is likely to decrease your property taxes for the following year (the bill you will receive in early 2013) as the tax assessor bases their property tax valuations on the previous year's transaction prices and taxes are billed in arrears (at the conclusion of the year instead of the beginning of the year).

I'm assuming this unit is in Governor's Quarters based on the price... if so most of those properties are currently valued around $160k to $180k by the tax assessor. In 2013 I expect that the tax valuations will drop to at least $150k and likely lower, so you have a tax break to look forward to in your future. Congrats!
2 votes
Maria Morton, Agent, Kansas City, MO
Sat Jul 16, 2011
It sounds like the appraiser was the lender's appraiser then; checking to be sure the lender's interests are protected. He would have used the most recent SOLD townhomes for comps. He would have used comps geographically close to the subject property, hopefully, without crossing any major roads. Active listings are not used for comps. If your price is 114k, then 150k means you will have equity in the townhome immediately. Well done!
1 vote
Bonnie Cisse…, Agent, Lake Havasu City, AZ
Sun Apr 14, 2013
Your taxes will go by what you purchased the home for. Every appraiser is different. Most have to compare comps that have sold and also the ones currently on the market. Sounds like you got a great deal. Good luck!
0 votes
Krbucklin, Home Buyer, Beech Island, SC
Sat Jul 16, 2011
Oh, OK. I didn't realize this. I had no idea that the town homes down the road were foreclosures and that they could not be used as comps. I also did not know that you listed the appliances because they are part of the contract. I tell you I learn something new everyday going through this process again. This whole time I was wondering why in the world didn't he use the town homes down the road and now I know why. Thank you for enlightening me on this subject. I will also pass this info onto my husband as he is the one that was wondering this above all else.

Thank you for all your info Brandon you have also been a very big help!
0 votes
Brandon L. B…, Agent, Midway, GA
Sat Jul 16, 2011
I pulled your report and took a look, you are correct, they did not note the additional bathroom. Most likely he did not write it on the sketch on site and therefore overlooked it while transferring it to the computer. I assure you that they did go through the entire unit, the bathroom was simply an omission. I will let him know about it.

The appliances are listed in the appraisal because they are part of your contract, we appraise whatever collateral the bank will be taking and the appliances will be part of that collateral at closing. We will also have to perform a final inspection prior to your closing to document that they have been installed as required.

As for the comparable selection, I can not speak directly for their choice of comparables, but a quick glance at sales records showed no arms-length transactions of townhomes in that neighborhood. There were some in the development down the road however the majority were foreclosures (generally not usable as comparables) and the remaining two were much too large to use as comparables for your unit. Sometimes the comparables we use are not ideal but are the best available and the lending guidelines restrict which ones are utilized for many different reasons. When your neighborhood matures a little more there will be actual townhouse sales for use on future unit appraisals, it is certainly not a matter of being lazy.

Hope that helps, good luck with your new home!
0 votes
Krbucklin, Home Buyer, Beech Island, SC
Sat Jul 16, 2011
Oh wow this is too funny. Brandon I think the company you work for is the company that actually did the appraisal on our town home. You need to tell your guys to make sure they look through the whole house they are appraising because he missed a whole bathroom. Just a little FYI. :-)
0 votes
Krbucklin, Home Buyer, Beech Island, SC
Sat Jul 16, 2011
Hello Brandon!
Your close! LOL..but no we are not in Governor's Quarters. We are in Liberty Park. Those 5 little town homes in the middle of all that new constructions going up. Not the 3 three store town homes. It's called...I suppose ...Liberty Park at Independence. We jumped on this deal because when we have to move eventually(military) it will make a wonderful rental. 3 to 4 years ago this exact same town home that we are buying was listed for $175K(from what I can remember) so we know we are getting a pretty good deal. We did look at Governor's Quarters but did not like the layout or the way they were built.
0 votes
Krbucklin, Home Buyer, Beech Island, SC
Sat Jul 16, 2011
FANTASTIC! We have been so worried that with it coming back so much higher that something would go wrong.

Thank you so much Maria your advice and answers are much appreciated.

To answer your question no he would not have to cross any major roads to get to the town homes I have mentioned before. That's the thing I didn't understand and why I said he must have been lazy because the other town homes are less then 5 miles down the road. It just had me worried a little because his comps did not include any town homes and there are town homes that have sold recently right down the road. But you have answered my questions and I am feeling much better. Also, your right he did the appraisal for our lenders "piece of mind".

Thanks again for responding so quickly. It's why I came to Trulia with my questions. I knew I would get answers immediately.
0 votes
Krbucklin, Home Buyer, Beech Island, SC
Sat Jul 16, 2011
Thank you Maria! Your answer to the appraisal/taxes part was very helpful. Sorry to be cryptic. I meant the person who did the appraisal. He/she used comps that I find are not in league with the town home that we are buying and like I said all he had to do was drive down the street a tiny bit and he would find other town homes for sale. Yes, we have a agent and no we are not working with the seller's agent. I know that my agent can answer this question but I wanted a fast response and you guys deliver that. Plan and simple.
0 votes
Maria Morton, Agent, Kansas City, MO
Sat Jul 16, 2011
Appraised by who? If the lender you are getting the mortgage through appraised it, that means that they would be comfortable carrying a mortgage on the property for that amount. If it was the tax appraiser, then your property taxes will be based on that number. If it was an independent appraisal paid for by you, then that is the appraiser's opinion of value for that property. Those are the basic three different types of appraisals.

I'm not sure what to make of your other questions. Who is 'he that did the comps? You do have your own Buyer's Agent, right? You're not working directly with the Seller's Agent, right? Your agent can answer all of these questions.
0 votes
Justin Ruzic…, Agent, Greenville, SC
Sat Jul 16, 2011
independent appraisals done are in no way connected to your county property appraiser who sets the line/price for taxes.
http://blog.house-guy.com/2011/05/follow-up-on-2009-real-est…
0 votes
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