Hope everyone had a great Thanksgiving!
I was on vacation and wasn’t able to be on the show, but was tuned in from Arizona. Andy called in from Florida to quickly touch on vacation properties down there! A couple of our agents at the Realty House were able to fill in for us and talk with host Denny Long about buyer expectations.
As Denny mentioned, it seems that most US markets are favoring homebuyers these days, but that doesn’t mean that the sellers are desperate and willing to take any offer thrown their way. Tommy Anderson talked about how aggressive the market is. As we’ve discussed in past shows, it’s fairly common to see multiple offers on one property, and Matt Helling from Cambria Mortgage reminded listeners to scout out your mortgage options and get a pre-approval early. That way you get ahead of your competition.
In addition, when thinking about purchasing it’s important to learn the art of the lowball offer. Along with Lauren Peters, Tommy discussed the advantages and disadvantages to offering less. You can throw it out there and see what you get. If you get the property, you may have made a great deal and got it for a great price. However, you don’t want your low offer to insult the seller. So, how do you find the middle ground between what you’re willing to pay and keeping the seller interested in you as a buyer?
Use your realtor! They can help you look into your options in more detail. For example as one caller discussed on the show, they were very interested in a house but had a large tree that caused drainage problems. In order to fix the problem they would need to remove the tree, which came at a cost. Their realtor suggested offering low to cover the project. When doing this, however, you want to do your homework and figure out what taking out that tree would cost you, so you can justify why you went low.
Another topic that seems to be of confusion is how to determine an offer price when looking at the market value, assessed value and appraised value. In many cases, they are all giving you a different number! That is because they Are different – in who does them, how they are used, and for what purposes. To clarify:
Your assessment/ Assessed Value refers to tax valuations. Municipalities have to meet their budget obligations and have an assessment office in charge of collecting taxes. They also may have an assessor who determines the amount of taxes that need to be collected from each owner.
Your taxes are based on the size and value of your property and these valuations are based on Market Value. As Lauren explained on the show, the assessments are not updated very often and don’t keep up with the ever changing market. So if the market is rising and houses sell for more, the tax assessments may still be less than the market value.
An Appraisal is conducted by a state-licensed appraiser, usually for the benefit of a lender, to determine if the amount requested to be loaned is appropriate for the property. Matt added that this value is the only one that really matters from a mortgage standpoint!
Hope that answers some questions. Both Andy and I will be back on the show again this Saturday! Until next time…
– Chris Rooney