# What accounts for an extremely low house-purchase price?

**URL:** <https://boards.straightdope.com/t/what-accounts-for-an-extremely-low-house-purchase-price/753198>\
**Category:** Factual Questions\
**Created:** [April 26, 2016, 5:13pm UTC](https://boards.straightdope.com/t/what-accounts-for-an-extremely-low-house-purchase-price/753198 "2016-04-26T17:13:11Z")\
**Posts on this page:** 1\
**Page:** 2

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**Author:** ![iamthewalrus\_3](https://avatars.discourse-cdn.com/v4/letter/i/258eb7/32.png) [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)\
**Post date:** [April 28, 2016, 10:10pm UTC](https://boards.straightdope.com/t/what-accounts-for-an-extremely-low-house-purchase-price/753198/21 "2016-04-28T22:10:23Z")

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> [@Pantastic](#):
>
> According to the wikipedia article, prop 13 doesn’t use the sale price, it used the ‘assessed value’ originally, and uses ‘current market value’ rather than sale price if a home changes hands. Like I said, they use some kind of “official estimated market value” and NOT the sale price to assess property tax, so your example is not a counter unless the wiki information on prop 13 is completely wrong.

I just bought a house in California, and you’re sort of both right.

For most homes sales, the current market value is the sales price, pretty much by definition. I’m sure the assessor’s office has a statistical model that says approximately what the house should be worth, and they’ll send someone out to investigate if the price is too far below what they expect, but all I got was a letter in the mail that said “sales price $x”, “current market value $x” (same x), with sections to fill out if the transfer is of a type that doesn’t trigger reassessment (it wasn’t).

In response to the OP, the least I would expect a house to go for would be the cost of the land minus the cost of demolishing the house and starting clean. There are certainly structures that you could put on land that will have a net negative effect on the total value, if they’re in bad enough shape that all you can do is tear them down and start over.

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