short sale ?? taxes on appraisal vs selling price

ready2movesSeptember 5, 2012

We've 'bid' on a couple of short sales but our offer wasn't enough. We are about to do it again, but I have a few questions.

One, is that they just raised the asking price. We were told the bank wants more money from buyer as the seller can't pay more. ok...

we may be able to offer more, but if we do and the house comes back not worth that much (which we believe is the case), what happens with the homes actual value?

also, doesn't that raise the taxes?, as the house will of sold for MORE than the appraisal comes back?

I don't mind (ok, I do), paying off the sellers debt, but I sure in the heck mind paying more in taxes for a home that is NOT worth what it will sell for.

We were already told the house appraised out for less then the asking price. Now, the bank raised it.

It needs a lot of updating, which is up my alley, so I don't mind that, but the taxes worry me.

Does someone know the answer to this???

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kirkhall

The tax question is a matter of location. In my area, county appraisals are based on sale price, then adjusted from there. So, yes, if it "sold" for more than it would normally appraise for, you will be paying more taxes.

In other areas, sales price has no effect on county taxes. So you need to know how it works in your area.

More to the point, though, are you buying this with cash? Because if not, there is no way a bank will lend you money for more than it will appraise.

    Bookmark   September 5, 2012 at 12:19PM
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brickeyee

Some places use actual sale prices as the tax valuation, others use an average of sale prices in defined (at least at the tax office) adjusted for amenities (bedrooms, bathrooms, lot area, age of the structure, phase of the moon, whatever method they are allowed to use.

Virginia generally requires averaging spread over some method (that the tax office does not want to discuss) but other places use sale prices.

One thing that is common in areas that use 'market value' is that they often hold the valuation low enough to avoid a lot of appeals.

I have never had a property (VA, NH, and other places) I would sell for the tax appraisal.

It makes it hard to argue your valuation is high.

    Bookmark   September 5, 2012 at 3:03PM
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dekeoboe

but I sure in the heck mind paying more in taxes for a home that is NOT worth what it will sell for
Pretty hard to argue that it is not worth what it will sell for. What other method would you use to calculate what it is worth?

    Bookmark   September 6, 2012 at 7:28PM
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ready2moves

where we are looking, the selling price is what the taxes are based on. I just find it not fair, as the house will NOT appraise out on the price we need to pay for it. We won't get it unless we pay the seller's debt, basically.
we are looking at about 20 to 30K more to pay to get the seller out of debt. The taxes are really a lot on that selling price. I think the bank is unfair, they got themselves into it, not me. Also, why can't the bank go after the home the seller's are living in now, or some of their fancy toys?
sorry, to complain. :)

I may just look at another house, but, i like this one.

PS, it also needs updating to at least $50...

    Bookmark   September 7, 2012 at 2:05PM
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ready2moves

oops

$50K not $50

    Bookmark   September 7, 2012 at 2:06PM
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terriks

Why would you pay more for the house that it's worth? Is it the only suitable house for you?

    Bookmark   September 7, 2012 at 2:38PM
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maremma

Why not discuss this property with the local tax assessor, who would be able to answer many of your concerns.

If you then still wish to proceed with making an offer, offer only what you are comfortable with. Quite often banks take a hard stand and then back down when a solid contract is presented. Also, are you quite sure that your realtor is working on your behalf? Just askin'.

    Bookmark   September 7, 2012 at 2:51PM
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brickeyee

" I just find it not fair, as the house will NOT appraise out on the price we need to pay for it. We won't get it unless we pay the seller's debt, basically. "

Souns like the owner is under water owes more than market value0.

Time for them to cough up money or start chasing a short sale if they MUST sell.

It is not your responsibility in any way to make up for the present owners problems.

THEY screwed up, one way or another.

    Bookmark   September 8, 2012 at 9:51AM
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