Tax value's relation to sale price?

Question

I'm looking into an owner-financed property. I noticed that the tax value is below the owner's asking price. I thought I was told before that for properties priced above tax value, lenders refuse to finance them later when you're ready to obtain a traditional mortgage. And that this is how a lot of these owner financed deals are doomed. But the seller says that tax value is just a value given by the county, and is often below actual purchase price, especially if the property has been very well maintained like this one has.

Am I misunderstanding the relation of tax value to sales price? I don't want to think badly of the seller or anything like that, in case that she's right and I'm wrong, you know?

BTW, the tax value is around $74,000 but asking price is $89,000. It's a very well maintained home, but I'm just not sure if something fishy is going on!

Answer 1

What your looking at is the the properties previously assessed value. Whenever a property is sold the tax assessors office would re-assess the value of the property. They value that your looking at for $74,000 is what he probably paid when he bought the property/or what it was assessed for on the last transfer date.

Answer 2

Some areas of California have a measure in effect that limits how much property values can be raised in a year. When the housing boom hit and values shot through the roof, these homes have a fraction of their actual value listed as tax value. Other areas have similar programs.

Tax value is something assigned by the county or city, and it is not necessarily an accurate representation of real market value.

Some lenders work from tax value, if there is not an appraisal in place. An appraisal would eleviate this situation if you find yourself facing challenges with traditional financing.

Nothing fishy here.

Answer 3

Nothing fishy is going on. The seller is 100% correct. I do real estate in a tri-county area, and have seen municipal assessed values anywhere from about 80% of current value to 110% of current value.

Municipal assessments generally do not correspond to actual values. If they do, it's mostly by accident.

Answer 4

Nope, you're lifeless incorrect. you're taxed on the trustworthy fee of the valuables as desperate via the county. You getting very plenty, does not propose that the county could use your decrease fee through fact the assessed fee. If the two quantities may be the comparable, then why is there 2 diverse words for the comparable quantity? That in many situations in basic terms occurs while a house is bought at trustworthy marketplace fee in accordance to the county, yet via no potential is that California state regulation.