BiggerPockets

Assessed Value vs Market Value

Friday, April 08

I received an offer the other day with a purchase price well below asking and market value.  When I asked the agent where they had come up with this price, they said it was a good offer because it was above the Boston home's assessed value.  Instead of being annoyed because these poor buyers weren't educated about what the assessed value really is, I then created a chart of the assessed value verses sold price within the last year in that specific town.  The ratios were all over the map, from 87% to 102%.  Clearly, this is not an effective way to value a property.  Market value is the most effective way to come up with a good price for a home.  Market value looks at the last six months sold property with similar criteria as the one you are looking for. 

Assessed value is merely the way the town can calculate how each home can be taxed.  Every several years, the town will want to do a walk through of your home to make sure the value they are coming up with is accurate; taking into consideration updates and additions to the home.  If the town does this over the course of a couple of years, a Boston North West home that had a walk through 6 years ago and then had some updating done 3 years ago will have an inaccurate assessment unless you have the town come out to change the assessed value.  People don't tend to do this, since no one wants to pay more taxes on their home. 

It is extremely important for the buyer to understand that the assessed value should not be used to determine market value.  Market value is using the most up to date information for sold properties taking into account all updates and additions to the Boston North West property.

Heather Plate, your source for Boston North West real estate

Most Recent Blog Posts

Thinking About Packing Up? Here's Where to Start
The Do's and Don't s of Buying a Home

Read my other posts in the "Testing My Real Estate Theory" series:
Testing My Real Estate Theory - Setting the Stage
Testing My Real Estate Theory - First Things
Testing My Real Estate Theory - Quick Overview
Testing My Real Estate Theory - Home Inspection
Testing My Real Estate Theory - Moving Things Out
Testing My Real Estate Theory - Setting the Stage
Testing My Real Estate Theory - Brokers Open
Testing My Real Estate Theory - A Successful Open House
Testing My Real Estate Theory - Storing Your Stuff

Thinking About Packing Up? Here's Where to Start

Thursday, March 24

Thinking about packing up, but don’t know where to start?  Start by getting the boxes. If you are looking into hiring a moving company they will usually supply you with moving boxes of all sorts of sizes. But I am often asked the question of where people can get boxes.

These are my suggestions. Mike and I are moving ourselves into PODS first, storing the items in there for a few weeks while we refinish the floors and paint the walls. PODS offers moving packages with bubble wrap, a couple of different size boxes and a permanent marker to keep the boxes organized. Uhaul also sells boxes and we bought our moving supplies at Home Depot. The next best thing to going to storage facilities, moving companies and home repair stores is to utilize liquor stores or other retail stores that may have extra boxes lying around. They are usually happy to get rid of them and free up extra space.

Start organizing the rooms you may not need to use your last month of occupancy. I started with my dining room and China, knowing I was definitely not going to have any dinner parties soon. Next, I went to the kitchen and wrapped up all my baking and extra pots and pans. I went through the food to see if anything had expired or had plenty of life in it and, therefore, could be packed up. I continue to go through my house to the linen closet, basement, atic, kids room and so on. We are still a month away from moving day, but we have all the items we need.

Note: Come up with a color code -Dining room one color, master andother. If there is green and pink that means it is something fro the dining room that is fragile. Colors are easier to see and read. Go through filing cabinets now - not when you move it. Once you move in, you are too tired and in a rush to get your house put together.

Organize now while you can, if you can. Don’t over pack boxes. Know what is a reasonable weight and try to balance heavy items and light items in one box. Put all liquid items in plastic storage bins – If a bottle explodes or spills it won’t destroy the box and you will still be able to lift it.

The Do's and Don'ts of Buying a Home

Monday, March 14

You've bought a Boston North West home.  The seller has accepted your offer and the P&S has been signed.  You can already picture moving your family into the new place.  But, your furniture seems a little worse for wear.  So, you decide that you need to go out and buy a whole new seating arrangement for the living room, you now have a guest bedroom that needs to be furnished and you want to upgrade the kitchen appliances to stainless steel.  Put the brakes on, buddy!  You don't want to make any big purchases until AFTER your Boston home has closed.

This is just one of the Do's and Don'ts when you are in the process of buying a Boston area home.  There are several more.  For example:

DO...
Stay current on all credit accounts.  This includes your credit cards, car payments and any other credit account you currently hold.

Continue your normal spending habits.  Sudden deviations from your normal routine may throw up a red flag to lenders and actually lower your credit score.  That doesn't mean you should max out all of your credit cards.  Just don't make any sudden changes to your spending habits while your loan is being processed.

DON'T...
Apply for new credit.  Now is not the time to buy a new car or furniture.  Shred any enticing offers for new credit cards.

Pay off old debt.  Unless specifically advised to do so during the mortgage application process, do not pay off any old debt.  Wait until your loan has closed to do it.

Close credit accounts.  This can affect your income-to-debt ratio, hindering the acceptance of your loan.

Change employment.  This doesn't just mean changing jobs from one company to another.  It can also mean changing from one position in a company to another.

These are just a few of the Do's and Don'ts of buying a home.  To view more, please read Bill Nickerson's helpful article (used with Mr. Nickerson's prior approval).  If you need help navigating the waters of Boston North West real estate, you can always contact me.

Heather Plate, your source for Boston North West real estate

Read my other posts in the "Testing My Real Estate Theory" series:
Testing My Real Estate Theory - Setting the Stage
Testing My Real Estate Theory - First Things
Testing My Real Estate Theory - Quick Overview
Testing My Real Estate Theory - Home Inspection
Testing My Real Estate Theory - Moving Things Out
Testing My Real Estate Theory - Setting the Stage
Testing My Real Estate Theory - Brokers Open
Testing My Real Estate Theory - A Successful Open House
Testing My Real Estate Theory - Storing Your Stuff

Testing My Real Estate Theory - Storing Your Stuff

Friday, February 25

We hadn't gotten very far with the purchase of a new Boston North West home. We were waiting to sort out a few inspection items, none of which are a big deal. We were supposed to sign a P&S come Tuesday, but we'll have to see if we get there or not.

In the meantime, we still had to organize our move out. Mike called POD last week to have them deliver a POD two weeks prior to closing. (If you aren't using a moving company, this seems as though it is the next best thing.) POD allows us to move our items into the storage unit in our free time. We don't have to drive back and forth to and from a storage unit because this is right in our front yard.

If you are selling your Boston house for the first time, you may not be aware that you should vacate your house the day prior to closing. This allows for the buyers to do a final walk through to assess that nothing has been damaged or changed since they put an offer in. This puts most sellers in an awkward position because you are more or less homeless for 24 hours, meaning your belongs either need to be in storage or on a moving truck. To save a bit of money, we went with the POD, just as we did with our last move. It worked out well. They come and drop off the unit, pick it back up on a day that works for you and then deliver it to the next destination and leave it there as long as you want (or as long as you are willing to pay to have it there).

Heather Plate, your source for Boston North West real estate

Read my other posts in the "Testing My Real Estate Theory" series:
Testing My Real Estate Theory - Setting the Stage
Testing My Real Estate Theory - First Things
Testing My Real Estate Theory - Quick Overview
Testing My Real Estate Theory - Home Inspection
Testing My Real Estate Theory - Moving Things Out
Testing My Real Estate Theory - Setting the Stage
Testing My Real Estate Theory - Brokers Open
Testing My Real Estate Theory - A Successful Open House

Testing My Real Estate Theory - A Successful Open House

Thursday, February 24

As I posted earlier, I was going away with my family for the weekend.  That way we would be out of everyone's way and we wouldn't need to worry about keeping our Boston North West house tidy in between appointments.  Telling 2-year-olds to keep the house neat and tidy for potential buyers just doesn't seem to work well.  We were off and the showings took off.  To remind you all of our real estate goal/theory, we wanted to sell our Boston area home the first weekend to save our sanity from having the two small kids, a husband who travels and my spring real estate market right around the corner.  On our way up to Mike's parents house, we got the call that our first offer came in.  We told the agent that we would be reviewing all offers Sunday at 6pm.  We did this because of the amount of interest our house was getting.  There were several agents that had interested buyers.  

That Saturday, we had over 10 appointments and, for the open house on Sunday (which was not advertised in the newspaper, only online), we had over 25 groups of people through our Boston home.  Sunday night, Mike and I sat down, reviewed our options and ended up taking the first offer that came in on Saturday.  The reason for accepting this offer was simple...it was very close to the price we wanted, they were flexible with a close date, but most importantly, they waived their home inspection clause.  We were very happy with the offer and, more importantly, I proved that my real estate theory is solid.  If you price your home aggressively, not too high to leave room for negotiations, you stage the home to perfection and you have a desirable location, your house will sell quickly and for a solid price.  What does the rest of the transaction look like?

We were supposed to sign the P&S the following Monday, but neither party thought there was any need to wait.  Within five days of the offer, the P&S was signed and the appraiser had already been to the home.  Now it is our turn to search for our next Boston area home.  It was rather easy since we started this process with our eyes set on a particular property.  It was a home that had more space in a wonderful neighborhood, only two miles from our current home.  We started in with negotiations and instantly thought this wasn't going to be as easy as selling our home.  The standard 24+ hours to have a response came and went without a word from the Seller.  Another day came and went.  This went on for four days.  Then the Seller accepted our offer.  Our offer was very competitive.  We are putting down over 20%, we have our Boston house secured with the P&S and, lastly, we have a closing date out 2 months, giving her plenty of time to find her next home.  The drama continues...

Heather Plate, your source for Boston North West real estate

Read my other posts in the "Testing My Real Estate Theory" series:
Testing My Real Estate Theory - Setting the Stage
Testing My Real Estate Theory - First Things
Testing My Real Estate Theory - Quick Overview
Testing My Real Estate Theory - Home Inspection
Testing My Real Estate Theory - Moving Things Out
Testing My Real Estate Theory - Setting the Stage
Testing My Real Estate Theory - Brokers Open

Testing My Real Estate Theory - Brokers Open

Monday, February 21

Well, the day came for our Boston North West house to be put on the market.  We had the cleaning crew come early, the stager scurrying around to make the house look absolutely perfect and I was busy trying to get myself ready and the kids out the door.  I had one of my favorite mortgage brokers, Bill Nickerson with Mortgage Network, cater the broker open house to attract more brokers (who doesn't want a free lunch?).  The chaos settled for a brief minute and then the brokers started to show up.  For anyone who doesn't understand the need for a Broker Open house, it gives agents the ability to preview houses for their potential buyers.  Even if they don't have buyers for that particular Boston house, it helps brokers to get into as many houses as possible so we'll be able to compare properties properties for future Boston area homes we may have coming on the market.  About 50+ brokers, a very impressive outcome, tromped in and out of my house with wonderful feedback.

Mike and I worked very hard to get the house ready for the market.  We put several thousand dollars in, just to make it more saleable.  All our hard work was paying off with every positive piece of feedback we received.  We had several showings that day.  Our kids were sick with an ear infection and bad colds, so we didn't show our house on Friday (the following day).  We needed a day when I could concentrate on them and make sure they were feeling comfortable in this newly configured home.  I usually would not recommend closing down your house for showings, but when it comes to sick kids, there is no choice.

Saturday, we had roughly 10 showings and an open house scheduled... Come back to see if my theory comes to life...

Heather Plate, your source for Boston North West real estate

Read my other posts in the "Testing My Real Estate Theory" series:
Testing My Real Estate Theory - Setting the Stage
Testing My Real Estate Theory - First Things
Testing My Real Estate Theory - Quick Overview
Testing My Real Estate Theory - Home Inspection
Testing My Real Estate Theory - Moving Things Out
Testing My Real Estate Theory - Setting the Stage