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How to determine Market Value on an oddball

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Rocky Mountain High

Thread Starter
Sophomore Member
Joined
Sep 21, 2003
Professional Status
Certified Residential Appraiser
State
Colorado
Problem - My client is attempting to determine the current market value for a Townhouse in IL. The subject is currently listed - on the market for 300+ days; the last price change was to $299K in early December 2007. (originally listed inline with the competition). The appraiser notes declining market conditions - and values the subject conservatively at $320K - all sales of similar townhomes closed at $330K to $350K - all competeing listings (not an oversupply) are at $340K and higher.
So, in my opinion, the appraiser's conclusion of $320K for this short sale property seems reasonable. Now, the issue. The subject has annual property taxes (which shows in MLS & county records) of $9,700 - ALL units in complex have taxes of $4,200 and less, neighboring complexes are $5,000 and less. My theory and the appraiser's theory is "why would a buyer purchase an identical unit where taxes due are double the amount - he is going to have to go to the closing table with a portion of that". My client states that the MLS states (which it does) "CERT OF ERROR APPLIED FOR". However this statement has been in the MLS since it listed 300+ days ago and the issue has not been resolved yet.

My question - how does an appraiser adjust for something like this to arrive at a value conclusion that makes sense? by the way, the taxes have not been corrected.
 

Mike Kennedy

Elite Member
Joined
Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York
verify whether the ML reported taxes include a RE-LEVY and penalty for delinquency?????
 

Mr Rex

Elite Member
Joined
Jan 12, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
If $299k is a deal, why hasn't it been scoffed up? $4500 in extra taxes is surely not the answer. Umm, I don't want to pay $4500 extra in in taxes just to save $20k-40k minimum,...... per your assertion.:unsure:
 

KD247

Senior Member
Joined
Jan 24, 2002
Professional Status
Certified Residential Appraiser
State
California
Problem - My client is attempting to determine the current market value for a Townhouse in IL. The subject is currently listed - on the market for 300+ days; the last price change was to $299K in early December 2007.
Any offers at all? It seems like the typical buyer would get pretty far into the process before they realized that there was a difference in property taxes. And, it seems that a few buyers would have made offers contingent on removal of the tax problem.

When you say "not an oversupply" of competing properties, do you mean that other properties are periodically selling at $340k while you client's sits there at $299k without a nibble? There's a missing piece to this puzzle.
 

Rocky Mountain High

Thread Starter
Sophomore Member
Joined
Sep 21, 2003
Professional Status
Certified Residential Appraiser
State
Colorado
KD - no offers per the listing agent. MLS does state "bring all offers". and again, please note, in this area, it is common that the property taxes are on the MLS - buyer's agent would see this (if looking at available comps, all the taxes for all the units are noted - when pulling all the listings, it's right there in black and white) - so it wouldn't be a "missed" variable). My comment about the "not an oversupply" means there is not a lot of competition, maybe 5 other similar units, all priced at $340K and higher. This is a smaller complex, only 3 sales of similar/same units in prior 12 months that the appraiser used in report.

To clarify even more - below is the text taken from the MLS listing for the subject:
MUST SELL. PRESENT ALL OFFERS. CERT OF ERROR APPLIED FOR.
TAXES SHOULD BE APPROX $5800. GORGEOUS NEWER TOWNHSE
DESIGNED WITH STYLE THIS 2 STORY HAS 9' CEILINGS, BALCONY,
FIN BSMNT AND 2 CAR GARAGE. GOURMET KITCHEN WITH ALL
APPLIANCES AND EATING AREA. ALL OFFERS MUST INCLUDE BANK
CHECK EARNEST MONEY AND PRE-APPROVAL LETTER. PLEASE ALLOW
ADEQUATE TIME FOR LENDER'S ACCEPTANCE. SOLD AS-IS.

Please also note - I, and the appraiser, saw the interior - there is nothing wrong (damage) with this unit.
 

Mike Kennedy

Elite Member
Joined
Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York
only 3 sales of similar/same units in prior 12 months that the appraiser used in report.

track 24-36 months........
 

Mr Rex

Elite Member
Joined
Jan 12, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
Early December until now is +/-60-75 DOM at $299k.(Total of 300 per the OP) in a market that supports 320-340? What is current DOM? A fortune teller with tea leaves could see something wrong with this picture.
 

Rocky Mountain High

Thread Starter
Sophomore Member
Joined
Sep 21, 2003
Professional Status
Certified Residential Appraiser
State
Colorado
by the way - any appraiser's out in Des Plaines IL willing to take on this beast & determine a current market value???? email me at [email protected] w/fee quote
 

Rocky Mountain High

Thread Starter
Sophomore Member
Joined
Sep 21, 2003
Professional Status
Certified Residential Appraiser
State
Colorado
Mike - sorry - I had 4 sales in prior report. I am not clear - what would sales from 24 - 36 months reveal? Market drop? If market dropped from some amount (x) to $340K - and my listings aren't priced below market and have insufficient market exposure time. ?
 
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