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Debbie Siegel's Mortgage Minute
Listing Price, Tax Assessed Value and Appraised Value - What's the difference?
What's a property worth? It's important to know when you buy or refinance.
Three different numbers get tossed around - the listing price, the tax
assessed value and the appraised value.
As a buyer, you zoom in on the listing price determined by the realtor.
After all, that's how you figure out if the property is within your reach.
Of the three numbers we're considering, it's also the figure with the
least methodology behind it. Realtors research comparable prices on the
Multiple Listing Service, but also listen to their instincts.
There's often a gap between listing price and tax assessed value -- the
dollar amount at which your municipality values your property for
taxation. That's to be expected in a rising market for real estate. Why?
Because tax assessed values are based on old data. The tax assessed value
of your house for fiscal 2006 may have been calculated from data collected
during calendar year 2004.
Appraised value is typically the best researched and most current
valuation of your property. Banks want to ensure that your property
justifies the amount they're lending you. So their appraisers use
comparable sales during the last six months. No other 4-bedroom, 11/2 bath
properties sold nearby recently? No problem, they make adjustments vs.
comparable 3-BR, 11/2 bath properties. The appraiser simply extrapolates
the extra bedroom's worth from market data.
* Next 37 17 investors only!
Ideally your appraised value should be close to your selling price. If
not, you're overpaying or there's something odd about your transaction.
Got questions about real estate financing? Contact
Debbie@westchester-mortgage.com
or 617-965-1236. She'll consider them for
inclusion in a future column. Debbie Siegel is president of Westchester
Mortgage in Newton, Mass. She is licensed in several Northeastern states.
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