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When the price is wrong

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Francois K. Gregoire

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When the price is wrong

Sometimes, a sudden jump in the price of a house could indicate mortgage fraud.

By DAN DEWITT, Times Staff Writer
Published February 3, 2008

HERNANDO BEACH - John McRae watched as weeds took over the yard of the house across the street, 3223 Hibiscus Drive.

In an otherwise peaceful neighborhood, deputies began to show up regularly to stop fights between renters. A crew of vagrants moved into a crawl space underneath the house.

Meanwhile, the home on Hibiscus, valued for tax purposes at $416,476, repeatedly sold for much more: $560,000 in April 2005, $810,000 a year later and $835,000 six months after that.

http://www.sptimes.com/2008/02/03/Hernando/When_the_price_is_wro.shtml

 

Terrel L. Shields

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In our market it would not have been upcommon in 05 for a property to sell for 205 above the assessor's estimate...but very rare to see it sell for double.
 

Mike Kennedy

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Carr's group, which received no formal complaints of fraud among its members, is set up to educate Realtors, he said, not help prosecute them.
"I think that's beyond the scope of this organization."

Exactly the same thought process that plagues the appraisal industry.

Ethics Rules either mean something or they are just ........hot air.

Kudos to Frank for his efforts.

Apparently the Message hasn't "sunk in".
 
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David Wimpelberg

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Do people really consider the assessment value as an indicator market value? I don't; I might as will use zillow if I'm doing that. I consider it in regard to the future potential for the taxes to be raised, but that's it.
 

Francois K. Gregoire

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Florida
Do people really consider the assessment value as an indicator market value? I don't; I might as will use zillow if I'm doing that. I consider it in regard to the future potential for the taxes to be raised, but that's it.

The St. Petersburg Times does consider assessed value as an indicator. It is public information, and is a government source.

I'm not sure how assessments compare in Hernando County, FL, but here in Pinellas County, the assessments routinely EXCEED market value.
 

Mike Garrett RAA

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Colorado
Do people really consider the assessment value as an indicator market value? I don't; I might as will use zillow if I'm doing that. I consider it in regard to the future potential for the taxes to be raised, but that's it.


I always "consider" the assessed value...as a piece of information! Some times it is much more reliable than some appraisals I have seen.
 

Mike Kennedy

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Considering that, in my markets, the vast majority of Assessment records are outdated or simply incorrect for a number of reasons such as:

1. inclusion or, or lack of knowledge on and ommission of, illegal CONVERSIONS

2. recent "mass appraisal" data gleaned by trainee "data collectors" consisting of Verbal Inquiry at the door with homeowners essentially verifying EXISTING property data sans physical measurement or ANY interior visual observation, I give Zero weight to Assessed Values.
(* yes I've witnessed the above "phenomenom" on multiple occasions while IN the homes doing an appraisal).

3. "spot data" on new subdivisions using physical site inspection data 1-3 new homes in 50+ unit detached homes (due to lack of adequate staffing) supported by Builder Brochure sketch renderings (including open second floor area) then utilized for the remaining units. Subsequent site inspections often illustrate the original blue prints / brochure plans had been modified - assessment records not updated to reflect the Actual Improvements.

4. Assessment Property cards with GLA based upon MLS printouts in the file. often INCLUDING clearly BELOW GRADE finished area in GLA. Discussions with Assessors typically revealed a common thought process: "Yes I agree it's a below grade basement, but, if they are gonna list and sell em including basements then, hell!, I'm gonna tax 'em that way".

5. a wide variety of other factors. None necessarily based on the LEGAL, transferrable, use of the site. Verbal admonishments abound -"we tax what we know is there, whether Legal Use or Not. Need confirmation of that - go see the Building & Zoning Inspector".

(and before someone asks, YES, I do that for Subjects AND comparables- on EVERY assignment).

Assessment Value is the Assessors' OPINION.

I'll develop my own - thanks.
 
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Mike Garrett RAA

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And you are welcome to do that...I still say, "it's a piece of the puzzle!"
 

Jim Bartley

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Virginia
I'm reviewing an appraisal right now that I think the assessed values could be a good indicator that something is wrong.

Subject: Assessed value $230,500

Comp 1: AV $356,500 sold for $350,000
Comp 2: AV $325,400 sold for $375,000
Comp 3: AV $352,900 sold for $385,000
Comp 4: AV $318,200 sold for $380,000

Like Mike said, its just one more bit of information. I KNOW assessed vlaue does not equal market value, but you think the client that ordered review might like to know the above?
 

David Wimpelberg

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In the areas I work in, the assessors are trying to figure out how to estimate that values of the properties within the realm of reality. The higher the value, typically the larger the percentage it is off by. The current project is about 5x higher than assessed value.
 
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