By: Crissy Knibbe
Many real estate consumers have questions, but not sure where to turn to get answers. I have compiled a few questions that seem to have many consumers puzzled.
Q- "I want to know why what you pay for houses property taxes uses an home value that is different from appraisal value. Also is appraisal value different from market value?" –Facebook User
Well, this is a very tricky answer, but I will tell you exactly how the County Assessor will tell you. Buyers and sellers create value by their transactions in the market place. The Assessor is required to value each parcel by annually updating values based on current market data (sales comparables) and physically inspecting each property at least once every five years. Adjustments are made up or down as the market dictates. Property values are based on activity in the marketplace. If homes similar to yours are selling for a higher price, State law requires the Assessor to value your property at that market value. The County Assessor does not establish the amount of taxes you pay. If the market value placed on your property by the Assessor remained the same as the previous year, the increase in your taxes can be attributed to an increase in tax rates within your particular tax district. Tax rates can increase due to public voting on bond issues, such as school bonds, jail, etc., or an increase in the budget of a taxing entity. The method for figuring ad valorem taxes* requires four steps (1) you must know the taxable value of your property; (2) the assessment ratio (55% of market value for Primary Residential Property - 100% for all other property); (3) any exemptions and (4) the tax rate for your area of the County. Tax rates are set by procedures outlined in the Utah Constitution. Rates are not set by the County Assessor. There are many different rates in individual Counties, and they vary depending on where the property is located (county, city, water/sewer districts, etc.). The tax rate levied against a property makes a considerable difference in taxes owed.
Q- "I just purchased my property, why does the County have it valued for more than I paid for it?" –Real Estate Customer
There are numerous types of sales occurring throughout the County. Some are at less than market value, some may be greater than market value. Market value must be viewed as a willing buyer and willing seller without any undue pressure to buy or sell. For example: if an individual's employment transfers them out of the County, or perhaps they inherit family property, they may choose to sell quickly at below market value to free themselves of the burden of trying to maintain two households, or the home or property was a foreclosure and bought or sold less than market value to unload the property. On the other hand, one might choose to purchase a home above the indicated market value for reasons such as location to employment, relatives, schools, or a fondness for the overall structure and layout of the property. These, along with other sales that have occurred in the neighborhood, must be considered. The County analyzes what the majority of similar properties are selling for in your neighborhood and apply those findings, in terms of market value, to each property. If you have questions concerning your real or property taxes, you can always request to have it reevaluated. Just go to your County Assessor's office, they strive for factual evaluations.
Q- "Are bank owned or foreclosed homes a good deal to get and how can I get a list of all the foreclosures listed?" –Interested in Investing
This is a VERY good question! As our real estate market is always changing from good to bad to worse then back to good again, the answer to this question is universal. You can always get a list of bank owned homes through me! You can also find companies such as RealtyTrac online that charges a fee to see them. As far as whether they are good deals or not, that is the opinion of the person purchasing them. If you plan on investing in bank owned properties, there are a few things that you should consider before jumping in feet first. First of all, the price. Everything in real estate is negotiable, however the banks are more sophisticated about pricing than they were years ago. So those "Get a great deal on a foreclosure!" days aren't what they used to be. Lowball offers generally don't go very far. Second, plan on doing some repairs. And third, make sure you complete your due diligence. Do an inspection not only on the property itself, but on title too. Many times, the home has been taken back by the bank, but the bank does not have title transferred and this could take some time to resolve.
One of Vernal's local mortgage brokers, Cort Pierce from Republic Mortgage, says "Tell all renters to pay their rent with a check... This way it is easier to verify later..." When you transition from being a renter to applying for a mortgage, the lender will require proof that you have been paying your rent. Writing a check or getting a receipt are the best ways to provide that verification. Thanks Cort for that valuable information!
I am here to help! If you have questions about real estate, please feel free to ask me and I'll do my best to get you answers too.
I take buying and selling real estate seriously and so should you. I am driven to provide the best possible care and service to all my clients, old and new. I am caring, creative and committed to provide the best real estate experience you could have.
*Ad Valorem Tax- A tax, duty, or fee which varies based on the value of the products, services, or property on which it is levied.
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