Price of Other Homes in Developement Affect Value
BritNTwit
10 years ago
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LuAnn_in_PA
10 years agoBritNTwit
10 years agoRelated Discussions
Selling Home and Price/ value
Comments (10)"Our model bare bones is $270k". Ouch. I know this isn't at all what you want to hear, but I think it will be pretty near impossible for you to sell your house at $420k if the builder is offering the base model at $270. You definitely have a ton of upgrades, but if buyers in your neighborhood are willing to spend that much, they can buy the base model and have $150k to put in exactly the upgrades that they want, rather than the ones that are to your taste. That kind of money buys a lot of upgrades (even at overinflated builder prices), and you can't overlook the fact that a brand-new house is extremely appealing to many buyers. I know how difficult it is to compete with new construction, as we recently sold our 3-year-old house in a neighborhood where the builder was still building. The builder's base price when we bought the house was $245,000, and we added about $40,000 in upgrades (both builder options and after-market). When we sold, the builder's base price for our model was at $300,000, and we listed at $320,000, which was right in line with comparables that had sold six months before (there were no comps that had sold more recently). We were thinking that buyers would realize that they would have to pay more for all of those upgrades in a new construction home. Unfortunately, they didn't. The house sat for months with very few showings, until we finally lowered our price to $299,000. Our final selling price was $293,000, $7k UNDER the bare-bones model price. We feel lucky that we got that, as almost all of the resales in that neighborhood are now selling for less. You said that there are 42 houses currently for sale in your neighborhood. That's a whole lot of inventory, so that's going to work against you as well. Is your price in line with what has actually SOLD in your neighborhood (very recent sales, not six months or a year ago)? Listing prices don't mean too much. Unfortunately, you may have to significantly lower your price to sell. I wish you the very best of luck; I know how hard it is!...See Morehome value: tax assessor $ vs. asking price
Comments (10)No! Your tax assessment value is not the same thing as your asking price, even if you are in an area that supposedly tries to match assessed value with market pricing. The reason for this is that it is more important in most areas for the assessment data to be relatively equitable among properties (and tax payers in the same jurisdiction)than for the assessment data to perfectly track recent sales, on a sale by sale basis. This is essentially the difference between an "assessed" value and an "appraised" value. The assessment is for governmental revenue purposes and an appraisal is to establish market value, i.e. what you could expect to get for your property if you offered it for sale within a reaonable time period, i.e., now. Most people think of an appraisal as something done on behalf of a lender to evaluate whether or not to lend money secured by a particular piece of collateral, but it is also sometimes used to help co-owners (heirs, sibs, partners, divorcing spouses, etc.) divide property fairly and for individuals to get an idea of their porerty's likely selling price. . For this reason it is good way to get information when thinking about your pricing if you are ready to market. And an appraisal is slightly different from a CMA done by a realtor trying to attract a client to list with them. In many cases the realtor may suggest a sligtly higher asking price than what the appraisal data would indicate. This is partly to make owners feel good about a particular realtor's likelyhood of getting them top dollar, but it is also a rational way (in some markets) to test the waters and see how much interest is there. Remember, an appraisal is based only on closed sales, similar to a CMA, but it's not really intended to give you a figure that is the highest imaginable selling price if you get lucky, just the most likely fair market value if exposed to the market over a certain, shortish period (90 days, say). Your tax assessor is more interested in making sure that she/he has collected all the amenities in your house and making sure that relative to other similar houses your assessment is "fair". At present the amenities are the sorts of thing that typical real estate buyers are interested in, but truthfully, the tax assessment data could be based on any standard, say the number of drawers vs doors in a kitchen, or the number banisters in your stairs. (At one point in the early part of the US history, they taxed windows, so people made houses with fewer of them. In France they taxed the number of stories, so the Mansard roof style was developed to gain living space without being taxed for it.) There are two other common reasons why tax assessment data and fair market value diverge: the first is that in some jurisdictions assessment changes are only entered once per year, so many renovated houses lag, and secondly, in some jurisdictions houses that don't change hands are not updated. This results, over time, in gross inequities in tax collections, though it's a political nightmare to try and correct. And finally another factor, which always amazes me, is that at least in NY where I live, for tax assessment purposes old houses are substantially depreciated on a fixed basis compared to new construction. I happen to live in 150+ yo building in excellent condition, and everything in it is a certifiable antique. But if you created an exact replica (even with modern plaster, slate and flooring, etc.) it would by assessed at well more than twice of my assessment. It really makes no sense to me, since I can get a premium resale price for my old building over a replica, simply because it is old, but I am taxed at a very low rate because it is automatically depreciated due to its age. Go figure! If you're thinking of selling, I would pay for an appraisal and ask at least a couple of realtors for a CMA. (You aren't obligated by that. )Then you'll have a better, more up-to-date idea of your house's market value, in your market, right now. Molly~...See MoreProperty value affect on sale price?
Comments (6)Hi Kaleberg ~ Looks like we're neighbors! :) I live in Sequim and work in Port Angeles. However, I love Port Townsend, spend lots of time there and really would love to live there. I have been looking around Port Angeles too but don't want to live in town (though just tonight some friends and I were discussing all the very cool houses and neighborhoods there), and the homes on any property are still out of my budget. I will keep looking, though, as I would definitely prefer living in Port Angeles over Sequim, if I had to pick between the two. Will just stay positive and plan on an adventure whether it be buying a home here, or moving to another part of the country ~ things always seem to work themselves out....See MoreBe honest with me: how does our kitchen affect the value of our home?
Comments (40)herbflavor, We bought the place because it was all that we could afford at the time without a mortgage, and the housing crisis of 2008 was still fresh on my mind and I absolutely did not want a mortgage, and still don't. We could have qualified for one but we didn't want one. Our next house will also be paid for in cash but it's going to be our "forever" home and we are projecting that its going to cost 200k. DH owns a business, and now I also own a business. Both our businesses do well. We are not rich. We are middle class. But we will not get a mortgage; we are very debt-averse. -------------------------- homechef59: "I'm going to continue with the wall extension for the refrigerator. You said the refrigerator would be too big and stick out. So, frame the wall with an L-shape into the dining room just far enough to make the refrigerator sit flush with the line of cabinets. Just trying to keep a lid on costs and get you some improvements." That is still moving a load-bearing wall, which costs $3k+, right? -------------------------- scone911: "Given your sketch, and based on instinct and experience, I wouldn't put any more money into this house. It's not worth the hassle, and I don't think you will get it back if there are mass market developers in the area who can undercut you every few years with a new subdivision that has all the bells and whistles. This house is already nickel and diming you, and that's really bad for your finances-- when you are young, you have a golden opportunity to start saving for retirement, so you have the power of compounding working for you. Throwing cash into a money pit house on speculation that it might be worth something someday, if everything breaks just right, is asking for trouble, IMO. Don't take that risk if you don't have to." We own it outright; there is no mortgage or lien or backtax; nothing. Free and clear. "I'd divide the land, if possible, and put a stick built or modular in the new section. Keep the old place as a rental if you can. At least the old house gives you somewhere to live while you build, and a modular can go up fast." We prefer to save up our cash towards our "forever" house instead. Also, we think at this time that what the property really has going for it is the land. If we divided it up it would lose a huge amount of its charm. The house itself has no charm at all; the land has charm. It has trees and wildlife and feels like you're in a forest; it's quite pleasant. "If you can get the land divided and ready to go in the next couple of months, you might (just possibly) be able to move into a new place by Christmas-- and get on with your life." No, because that would require getting a mortgage. We believe debt is something you do when things are more certain, and given the state of the economy and world affairs we are very far away from the kind of comfort level that would draw us to a mortgage. I suppose that wraps up this particular thread. I'll post a new one with a much more accurate to-scale sketch of the kitchen, dining and laundry floorplan so it can be hashed out better. Thanks again everyone! This was very insightful and educational....See Morepalimpsest
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