If the value of a property is 500K and the market value is 1.1 million...?

Question

But the owner is trying to make a 4 million dollar profit, there is room to negotiate the price of a unit right?

Answer 1

Tax assessed value and real market value to two drastically different things. Don't confuse the two, many taxing districts set grandfather clauses to slow tax assessed value of property, which may or may not apply to the new owner. If the property you are considering is tax assessed at $500,000 now, you may pay the assessed value of $1.1 million when you purchase it. It's worth checking into.

4 million dollars profit? There should be room to negotiate the price.

Answer 2

Your question is confusing. When you say value, do you mean assessed value for tax purposes? If so, that can vary a lot depending on area, and might have nothing to do with what the property would be worth when sold. In some areas properties are assessed at a percentage of FMV. Where I live, my tax assessment is defined as half of the theoretical fair market value. Don't even ask why, that's how my area of PA does it - doesn't make much sense to me either, but nobody asked my opinion when they set it up that way.

Then you say market value is $1.1 million. Market value is what a willing seller and a willing buyer would agree on, so I'm not sure just where you get that number either.

If comparable properties have sold very recently for $1.1 million, and the owner is asking over $4 million for this one, then either there's lots of room for negotiation, or the owner doesn't really want to sell. But you're leaving out some piece of the puzzle here - no seller in his right mind would list property that much higher than it was worth. If you are looking at comparables, are you sure they are really comparable?

Answer 3

What values are you talking about? Is the assessed value 500K and its market value is 1.1 million and they are trying to sell it for 4 million? If thats the case the sell will sit on this prop for ever. First assessed value has nothing to do with market value. Sales price has nothing to do with market value, you can ask any price you want, but it does not mean it will sell. The only value you need to know is appraised value all the others mean nothing. Spend $500 and have it appraised and you will find your answer. No lender will lend 4 million on a 1.1 million dollar appraised home.

Answer 4

The value of a properly is its market value, 1.1 million in this case.
The 500k is its net asset value to the owner.
If he wants 4 million profit he must sell it for 4.5 million, which is far above its market value and no sane person will buy it.

Answer 5

The owner is dreaming. Who would pay him 4 times what the place is worth?
If he doesn't negotiate down, he will NEVER sell it.

Answer 6

it is only worth 250,000