which house...?

Question

My husband and I are looking to buy a house and have identified two we like, both with the same asking price of 319K however one is tax assessed at 313K and the other at 392K. Would the property with the higher tax assessment be a better investment in the long run?

Answer 1

Tax assessed values are not a good way to value a home. The assessor sees the home any time during construction phase and then only physically goes back to see if any external changes have been made every 2-3 years. If you leave the outside of the home the same and only change the interior then each year your taxes will go up the minimal standard rate. If however you add something external then they come back and you have a new base line for tax rate. Case in point my personal residence. At the time I purchased my home 3 years ago the assessed value was 90K and I paid 129K because the inside of the home was renovated and updated to new modern standards. So now 3 yrs later my assessed value has raised to 100k and yet my house appraised for 150k when I did a refi this year. So the best way to see which house is the best value is not assessed values. You need to get a better list of what makes each house special for you. Is the higher assessed home in need of more or less repair then the lower home? Is there something that is occurring in the neighborhoods that is causing homes to be assessed more than they are worth? Is the county the houses sit in going through a new school tax rate increase? There are many reason for the difference in values. The best answer would be to have an appraiser check each house. They look at market trends as well as market facts and what other like properties are selling for in those communities. It may cost up front money but would be better in long run as you may not be stuck with a home that wont hold its value. A good real estate agent is also not a bad choice. Some only want the money from the sale but most want you as repeat or referal people so they should help you in areas you may not be aware of also.

Answer 2

Don't count on the tax value to determine the real value. There are to many influancing factors. A Homestead exemption for example will keep the tax value from increasing more than 3%/year (here in Florida) even if all the other values in the neighborhood are going up this one will stay low - until it sells, then in most cases the tax value will be the sales price minus a certain percentage.
But there are a lot of other factors as well, like remodelling, new roof, more SF, Age and more.

Answer 3

I would want to know why the seller is asking less than the property appraiser is stating that it's worth? The fact that the Taxing entity thinks it's worth more may have no bearing on the matter at all. After all that's how they get paid! Value times millage rate=taxes, see? Go with a comparable analysis from a competent REALTOR! IF they are in different cities I guess it may make sense? Get some local advice from a REALTOR in the location! Good Luck

Answer 4

First, the tax assessments might have been done at different times or by different people. This is only a very rough approximation of the value, and you can't go by it.

Answer 5

In many areas the tax assessor does not ever visit the house. They appraise the house without looking at it. It does not reflect actual market value. You should not depend on that to decide which house to buy.

You have probably looked at a bunch of houses in that price range and area. If you can't decide then don't buy either one...just keep looking.