Many purchasers are operating under the falsehood that a home’s purchase price needs to be just above its tax assessed value. In other words, they understand that tax assessed is the same thing as “what a home is appraised.” See how we price homes on our guide: Tips for Selling your home.
This is definitely not the case, but simply this month I’ve met no less than three potential buyers selling vancouver real estate who refused to offer anything higher than the tax assessment value on homes they truly loved.
To fight this (at least in the vancouver bc real estate market), many Realtors have begun including phrasing like “priced under assessed value” in their marketing materials for the home’s sale. It has not helped. Instead, what’s transpiring is that buyers’ preconceptions are seemingly validated and, thus, endorsed.
Our BC Agents say that “Buyers see such homes as ‘good deals,’ but in truth they are not.” The ASSESSED VALUE turns out to be figured by the public tax professional. (At BC this was a provincial crown corporation known as BC Assessment.) The entire justification for the assessed worth is to determine taxes; that is all. This value is taken and combined with the tax levels of the area. Such is variant from the FAIR MARKET PRICE. Fair market value proves to be the price that a house can get on the open market. This is the price that educated, motivated, and willing purchasers will offer to procure the property from a seller who is selling of their own free will. Fair Market Value is created by looking to similar properties which have sold in the previous three to six months. (If no comparable houses are available, the timetable may have to be expanded.) Based on these homes’ going prices–these are called “comps”–the agents direct the seller on a fair asking price. Once a price is agreed upon between a buyer and seller, this becomes the fair market value of a exact property.
Thus, it stands to reason that before making an offer, a buyer could examine comps themselves to come to an understanding of what is reasonable and fair…