Buyers pricing rule of thumb when buying investment property?

[theent1]

I looked up the house I want to buy that is going way above tax assessed value (Seller wants 104k, but the tax assessed value is only 85k). Is tax assessed value a good idea on what to offer on a house?

[teach4life]

I am by far no expert, but we are in the process of buying a home, and we were told no. I am sure it depends on the county or state, or when the last formal assessment of property was completed. For example, in the state/county where we are buying a home, the tax rate is very low due to the fact that there are county schools and few publicly controlled services. The taxes and assessed values are low based on the tax formula that is in place, and the fact that re assessments are not completed routinely. However, in my particular situation (just as an example) there are certain recent restrictions (conservationists) that have been put on obtaining and building upon residential property that drive up the value (supply and demand) of existing residential land, and the area is also on the upswing because more and more people are discovering it.... the projected growth will be both steady and controlled,and that makes the land/area desirable (beaches...nature...parks..surroundings). So, although the assessed value of some of the land is ridiculously low, its the APPRAISAL that matters. Many times (as is in our case) its the appraisal that means everything. In fact, our lender stated that it is commonplace to only provide funding for the amount of the appraised value, and the buyer must make up the difference if the asking price is above appraised value. Make sure you have this stipulation placed on any bid :The buyer reserves the right to discontinue sale if the appraisal does not meet or exceed the asking price. (Many times..the buyer will be held accountable if they cannot secure financing, and has to pay fees based on the failure to do so.) Make sure to ask your lender about this. (We were not aware of this until someone told us to ask) So, in my non expert opinion, the tax assessed value has little to do with the actual value of the home. Good luck!!!!! Hope you have a less stressful experience than we have had!!! ASK LOTS OF QUESTIONS.
Dont be afraid to look stupid....asking little questions leads to BIG answers.