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Established Contributor
beach123
Posts: 570
Registered: ‎05-02-2007
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Shane-Property Tax Question

Hey Shane - thanks again for your knowledge!
 
Question - if a home is for sale for $280k, you buy it for $200k (yes, dreaming I know)...does the property tax reset to the amount you purchased it for, or does it remain that high?
 
Thanks!!!
Super Contributor
ShanetheMortgageMan
Posts: 8,113
Registered: ‎09-28-2007
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Re: Shane-Property Tax Question

That's a good question, and usually best to talk to the county treasurer/assessor in the county you are looking in.  It could be a percentage of the sales price, or it could be based upon square footage, bed/bath count, and lot size.  In California it's based on the sales price, in quite a few area's in Ohio it's based on the latter.  I know you are looking in MN, I was helping someone in Scott County and they were paying $1,880/year and they bought a home for $245k (purchased in '04)... I was helping someone in Carver County and they were paying $6,600/year for a $550k sales price (purchased back in '96), and then finally helped someone buy in Hennepin County and theirs were $2,520/year on a $173k sales price they purchased in '06.  So as you can see it can vary county to county.
Senior Contributor
fishbjc
Posts: 3,377
Registered: ‎11-30-2007
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Re: Shane-Property Tax Question

Beach,,you may not be dreaming.  We've had homes in our area selling for 60k less than their original purchase price.  My neighbors husband died & she was gettin' re-hitched.  Yep, she wanted *out* and was willing to take the loss. 
 
A house in a neighboring development sold at auction for $180k.  The original price paid was $280k.  Yes, there is about 20k in work to be done inside, but what a deal these people made!
 
In our area, the property taxes are paid upon the value of the home, square footage, etc.
 
 
Established Contributor
beach123
Posts: 570
Registered: ‎05-02-2007
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Re: Shane-Property Tax Question

Thank you both for that info:smileyhappy:  It's great to know, we were just really curious because there have been some that you know can't sell for that price so one would think the price would drop for taxes!
 
THANKS!
Senior Contributor
fishbjc
Posts: 3,377
Registered: ‎11-30-2007
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Re: Shane-Property Tax Question

beach:  you're in a great position.  Since you're a ft buyer, you can find a house you like...especially if it's been on the market for a long time...and low ball it. 
 
If you're looking at new construction...builders are offering amazing incentives right now.  Brad and I *shopped* yesterday because of boredom....free finished basements, free sunrooms, builder offering to offset six payments.....50% off of upgrades....twelve month payment offset
 
I found a cluster home last summer...old guy just wanted to dump it.  He paid $180 and sold it for $150.  Other clusters in that neighborhood were selling for 200+ and he had a corner lot!
Established Contributor
beach123
Posts: 570
Registered: ‎05-02-2007
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Re: Shane-Property Tax Question

I'll have to keep watch on that...there's a new development (not crazy about townhome because I want a dog for the kids), but it has the outdoor pool too, and is centrally located for the kids for school all through H.S eventually.
 
BUT...I read yesterday some not so good news about the builder - there were some sights that said "KHov sucks" type stuff:smileysad:
 
My realtor said there will be a February parade so she thinks owners will start to drop prices to compete with the builders and all their added incentives...
 
I am really hoping that we do find something in Feb so we can move May 1 (we have to give 60 day notice)...I've prepared a watch list I started back in October, but seriously I've been watching for two years so I will recognize addresses:smileyhappy:
 
Thanks for those tips though!  Can't wait!
Valued Contributor
Lady_Scarlet
Posts: 2,385
Registered: ‎09-10-2007
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Re: Shane-Property Tax Question

I am very AGAINST lowballing.  Yes, you can get a deal - but the next person buying in the neighborhood wants the same 'deal' - and your deal is now not a deal it -- is the value in the neighborhood. And your new neighbors be perturbed because you cost them equity!
 
If a property is priced right to start (and many aren't) - then it is priced at market - lowering that price lowers YOUR home value.  Downward spiral...
 
If a seller is priced right - lowballing can 'offend' them - they may not even counter-offer.  I would lean on my sellers to couter at market - but many agents don't (or don't know how to).
 
Market (let the appraiser do HIS/HER job of saying it's worth less) - and hope that the next one is a bit higher sale price (1-5%/year)
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Regular Contributor
berraco58
Posts: 184
Registered: ‎10-17-2007
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Re: Shane-Property Tax Question

[ Edited ]
I don't mean any offense LadyScarlet nor do I mean to start an argument, but Low-balling is a very subjective term, especially in real estate. Some people put value on items that others don't.
 
There's a beautiful townhouse, they claim it's 3 br/ 3 ba, has a two car garage and has a pool. The want 197k for it. A pretty reasonable price in my area. However, there are only two roads to get into this nice area which has about 20 houses (mostly townhouses). Both of these roads are poorly maintained and are cluttered with old abandoned warehouses and pretty shady looking residences. On to the house. The "3rd room" is a loft that would be a guest bedroom tops. When has anyone seen a loft bedroom that wasn't the master? Has this ever really looked right? So really it's two bedrooms with an extra living space above the living room. It has no identifiable dining room and the pool was built to fill in the backyard so there is like 2- 3 feet walking space around 3 of the sides and the other side is occupied by a huge table with shade (cute, but it consumes the space). No gripes with the garage. I wouldn't pay over 165k for it. I don't think I'm low balling.

My only thing is that some people want to go with the market value when the market value itself is driven by speculation and "hope". Why shouldn't someone attempt to low-ball a person? The whole housing market is an attempt to low-ball the buyer. If a home is selling for 300k and three buyers want to buy it for 300k. Do you go "eenie meenie minie mo" (I can't spell that) or choose the one with the nicest haircut. No, you say I'll sell it to whoever offers the best price. Its balance. It might drive the value of the property down but it could equally bring a high price back down to reality. And you may piss the neighbors off in the process but the law doesn't protect feelings. :smileyhappy:

Once again, I have been misunderstood in the past, this is not a personal attack or an attempt to begin an argument, just showing another perspective.


Message Edited by berraco58 on 01-07-2008 12:48 PM

Message Edited by berraco58 on 01-07-2008 12:51 PM
Senior Contributor
fishbjc
Posts: 3,377
Registered: ‎11-30-2007
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Re: Shane-Property Tax Question

Lady:  I understand what you're saying, but beach isn't buying a home to make the seller happy...it's her $$$ she's spending.  I see nothing wrong with writing a low offer.
 
With thousands of homes on the market....one seller says NO, another will say YES. 
 
 
 
 
 
 
Established Contributor
demi
Posts: 858
Registered: ‎09-18-2007
0

Re: Shane-Property Tax Question

Actually, I am buying a house, not yet under construction :smileymad:that I am choosing to build the 3rd bedroom as a loft - I am single, and would rather have the openeness.  Will put a sofabed in there so guests can use it (in addition to the 3rd).  Technically, this does make it only a 2 bedroom - which could (in some areas, not here) add up to benefits as well, reduced sewer/water counts, etc.  There are sometimes good reasons to do it.  In any case, all it needs is a fourth wall and a closet and its a bedroom.
 
In California, when prices start going back up, the county will be limited in increasing the taxes...so, I will be paying taxes on $260,000, while the same house around the corner might be $325,000.  Not really fair, but they can ask for a reappraisal.  What really isn't fair is if the prices do go up, someone else will new will be paying substantially higher taxes.  Although I like the protection, Prop 13 has some serious flaws. 
 
 

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