Home appraisal, value raise questions
Q: My question concerns appraisals and home values. Our house is appraised for tax purposes at a lower value than the house next door, which has more square footage. The houses were built on same-sized lots. Our neighbor’s house is dated inside, while ours has an updated kitchen and interior, and updated bathrooms. Our yard is professionally landscaped and well-maintained. We are considering putting our home on the market, but wonder how real estate agents determine a price. How do comparables take into account condition of a home and yard, as well as location and square footage? Also, an online estimate for our property is less than our neighbor’s. Won’t prospective purchasers try to use that estimate to negotiate a lower selling price? — askedith.com
A: Don’t worry too much about it. Your best bet for an estimate of current market value and listing price is an experienced local real estate broker. It won’t cost anything or obligate you if you consult two or three agents who are active in your neighborhood and take advantage of their expertise. Your place sounds lovely, but if it’s overimproved for the neighborhood, you could hear that it might not
Abring as much as it would on a more prestigious street. If your home is properly advertised so that a wide pool of buyers knows about it, you can trust the laws of supply and demand to produce true market value.
Q: Since we married, we’ve owned our own home. But now we are changing to jobs in New York City. If we can afford to, we will probably be buying a condo or a co-op. We have no experience with these. What is the difference between them? Can you give us any tips? — K. W. : Co-operatives are the older form of organization, found mainly in New York, Chicago and a few other places. When you buy one, you don’t own any real estate. Instead, you receive shares in a corporation that owns the whole development and a proprietary lease on your own unit. You will be told how much of your monthly payment would be income-tax deductible as your share of the overall property taxes and mortgage interest.
Because tenant-owners in a co-op development depend on one another financially, you may need approval by a board of directors. Find out how much of the building’s mortgage you could be liable for in addition to any loan you would place to buy your own shares.
A condominium involves a deed that gives you complete title to your unit and a percentage of the “common elements” — land, staircase, driveway, elevator, roof, heating system. You own real estate, with your own mortgage and tax bill for your unit. In addition, you pay a monthly fee for outside maintenance, repairs, landscaping, recreation facilities and the like. Before you buy, you should be furnished with material to read about the following:
Financial health of the organization you would be joining. Does it have enough money in reserve?
Condition of the building. Is it likely to need a new roof, elevators, boiler or windows, for which you would bear a share of responsibility?
Covenants, conditions and regulations you must observe. Could you rent out your unit, paint your front door red, have a roommate under the age of 55, someday sell the unit on the open market?
Percentage of owner occupancy. More owners and fewer tenants is the preferred situation.
Your lovely, place but if sounds it’s over-improved for the neighborhood, you could hear that it might not bring as much as it would on a more prestigious street.