Why would a home tax appraisal go down?
April 8th, 2010 | by admin |I just got my 2010 property tax appraisal and the value of my home has gone down 22,000 dollars. I am freaking out, I have no idea what would cause this. The decrease is on the home not the property. There is nothing wrong with my home.
I was thinking of putting my home on the market and now I am worried that I won’t get what I ask for it. The tax appraisel sheet I have also has a column for Market Value and it is the same amount.
This is great for tax purposes but not for selling.
I guess I will not be selling any time soon.
The value of your home is based on a market. For example, if you wanted to sell your home today and hypothetically there are not a lot of homes for sale out there, your home would be really valuable because buyers don’t have a lot to choose from and your home is rare. The value would then go up, and so would your taxes – which is based on the market value of your home.
The opposite has happened, there are tons of homes for sale right now, many are foreclosures and short sales which are really cheap, so your home has gone down in value because there are tons of homes now – they’re all cheap, and your home is no longer rare. If you were a buyer, why would you buy your own house at a high price compared to many other good homes in your area that are now cheap? You wouldn’t, the market price is lower – so that’s why your home value has dropped with the market. Now, once these homes all get bought up, and the market goes back to only having a few homes – your property value will naturally go back up.
This is all assuming that you have done nothing to the house to make it go down in value, and that you didn’t get neighbors who dropped the value of their homes by destroying it – which in turn lowered the value of your entire street. So, don’t worry like everyone else has said, and just hang on to your house until the values go back up (it fluctuates like stock prices).
I have included in the sources an article I have written about this specific issue. Homeowners are wondering why their homes are being appraised at a lower value (which is basically what you’re asking because your taxes dropped when your home value dropped), so I encourage you to check it out for a more detailed explanation.
6 Responses to “Why would a home tax appraisal go down?”
By Age of Reason on Apr 8, 2010 | Reply
Be happy since the town realizes Home values in your area have decreased and they adjusted your value thus decreasing the amount of property tax you pay
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By Froufrou on Apr 8, 2010 | Reply
This has happened to us, too. I think they do it to offset the increase in city and county taxes. It’s a double-screw, to be sure.
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By luminous on Apr 8, 2010 | Reply
probably because the home fiasco sweeping the nation
the home value can also go up or down depending upon the surrounding area, if your neighbors keep their homes looking bad your home value decreases.
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By Realtoratheart on Apr 8, 2010 | Reply
Don’t freak out, it’s really a good thing. A decline in value with the county means less taxes to pay.
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By Quicken Loans on Apr 8, 2010 | Reply
The value of your home is based on a market. For example, if you wanted to sell your home today and hypothetically there are not a lot of homes for sale out there, your home would be really valuable because buyers don’t have a lot to choose from and your home is rare. The value would then go up, and so would your taxes – which is based on the market value of your home.
The opposite has happened, there are tons of homes for sale right now, many are foreclosures and short sales which are really cheap, so your home has gone down in value because there are tons of homes now – they’re all cheap, and your home is no longer rare. If you were a buyer, why would you buy your own house at a high price compared to many other good homes in your area that are now cheap? You wouldn’t, the market price is lower – so that’s why your home value has dropped with the market. Now, once these homes all get bought up, and the market goes back to only having a few homes – your property value will naturally go back up.
This is all assuming that you have done nothing to the house to make it go down in value, and that you didn’t get neighbors who dropped the value of their homes by destroying it – which in turn lowered the value of your entire street. So, don’t worry like everyone else has said, and just hang on to your house until the values go back up (it fluctuates like stock prices).
I have included in the sources an article I have written about this specific issue. Homeowners are wondering why their homes are being appraised at a lower value (which is basically what you’re asking because your taxes dropped when your home value dropped), so I encourage you to check it out for a more detailed explanation.
References :
Appraisals and Home Values
http://www.quickenloans.com/mortgage-news/ugly-truth-appraisals
By lightupthesky25 on Apr 8, 2010 | Reply
Tax appraisals are roughly based on market conditions. So if your property appraisal has gone down, more than likely that of your neighbors’ has too. The tax appraiser never actually goes inside your home so s/he can’t see any improvements you may have made inside. S/he only sees what is on the outside. This is great news for your property taxes as now they will be lower.
As for selling your home. Realize that as I said tax appraisals are roughly based on market conditions, NOT on the actual condition of your home. My father-in-law works for the county appraisal district and says many times appraisers do not even actually go out to the homes in question – they simply guesstimate a value for the whole neighborhood.
If you want to see what you could realistically sell your home for, you should contact an independent fee appraiser. This person will come to your home and check out the outside AND inside of the home and give it a value based on this. This number could, however, be less than what the tax records appraise it at.
The home I purchased last November was appraised by the county tax district at $111K, but when we got our fee appraisal and FHA appraisal they came in at $105K and $100K respectively. Market conditions had changed in this time frame though, and that does have an effect. The market was selling at higher prices when the tax district appraised at $111K.
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