So, back in May, my wife and I bought our first house, for $100K, which was the FHA appraisal price. The previous owners bought it in 2006 for $105K, and made mostly cosmetic improvements.
While the market’s down in our town, just like everywhere else, this area never saw the ridiculous overvaluations that other cities saw at the height of the bubble, so the downswing hasn’t been as bad, especially in the more desirable neighborhoods.
We got a letter from the County Auditor this week as part of their 2011 county-wide property valuation. They want to revalue our home at $81K, down from the $105K they had previously valued it at, which was pretty obviously based on the previous sale amount.
We have the opportunity to protest this decision, using the FHA appraiser’s report as evidence.
On the plus side, at $81K, we’d save about $400/year in property taxes.
On the minus side, we’d be upside down on the mortgage within a month of making our first payment on it. Not a huge deal since we intend to stay here for the next 10+ years, but it’s still a pretty big hole to make up for.
It lowers your property tax. What is wrong with that?
Most people fight assessments that are too high. Most of them are.
If you are not selling, it does not matter.
I think this may be the first time that I have heard of someone complaining that their tax appraisal was too low. The tax appraisal does not determine the market price, so you would not be “upside down” on your loan just because the tax appraisal said so. I would probably double check their appraisal to see if they botched your square footage or anything. Otherwise, I would just enjoy the savings.
If you are uncertain, your best bet would probably be to contact your real estate agent as they might have a better idea what, if any, the low tax appraisal would have on resale value. The FHA is undoubtedly more accurate as the county appraisal likely doesn’t even rise to the level of a “driveby appraisal”. Usually they just use some formula based on square footage, geographic area, etc.
Shut up and say “Thank you”. Don’t check into, don’t do anything except pay your taxes as determined by the county. Your county appraisal is meaningless except for tax purposes - if you refi, if you sell, etc a bank appraiser will come appraise your house, and that appraisal is the only one that will matter.
I wouldn’t say anything - unless you find that sales in the neighborhood are affected by tax valuation. Even then, you’d be doing it to help the neighbors, not you (since as you say you plan to stay there for 10+ years).
Around here, tax valuations are often significantly less than the sale price. And it isn’t just because they lag a bit. The year we bought our house, its tax valuation was 65% of what we paid. A year later - well after a lot of houses on our street sold for Large Amounts (including ours)… our valuation was only 80% of what we paid the year before. The year after THAT, it was about 90% of what we’d paid. Currently, it’s listed at about 85% of what we got for the appraisal when we refinanced last year.
Thanks for the insight, folks. We’ll keep quiet. They haven’t finished entering our purchase yet, so there’s a non-zero chance that they’ll use the sale for the value, anyway.
Wow. A couple of years ago we refinanced. A few months later the city reassessed our house and lowered the taxable value, but the appraisal that was done for the refi showed an even lower value. I went to the city with that appraisal in hand to argue (successfully) for an even lower taxable value. Strange to hear that someone wants to do the opposite.
Southwest Ohio. Middle-class, diverse city neighborhood. Three bedroom. Half a block from a public pool / playground / tennis courts. Two blocks from a Montessori elementary school. One mile bike ride from the more rapidly gentrifying arts/bars neighborhood where we used to rent. Half mile from a Kroger. Screened in porch.
Mid way between Toronto and Detroit, 40 mins from beautiful beaches, was a 3 bdrm, (we converted it to a 2 bdrm), 135 years old, 9’ ceilings, hardwood floors, pocket doors, large weighted windows, walk in pantry, walk in attic, cherry inlay in hardwood floors in entry and what was the livingroom, now the office, (discovered when removing 40 yr old broadloom! Surprise!),
woodstove, 2 bathrooms, one with a clawfoot tub, enclosed porch, private fully fenced back yard, cherry trees, grape vine w arbor, blackberries, raspberries, mullberries, stone raised bed garden, all in the enviable historic downtown core, of a smallish university city.
Bought mine for the same price, only Canadian $'s. (Neener, neener, indeed!)