Real Estate Information Archive


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Questions Frequently Asked of the Assessor

by Group One Realty Team - Real Estate One

What is the difference between the Assessed Value and the Taxable Value of my Home?

Each year the Assessing Office must calculate the SEV (Assessed Value) and Taxable Value of each property for the 31st of December.  You will ususally get your new tax assessment in early March.  In determining the SEV, the assessor identifies area neighborhoods and used to use a 2 year sales study to analyze market values within each neighborhood, comparing the sale price of a property to its assessed value.  That was just changed and the new 1 year sales study period for the 2008 assessments was 04/01/06 to 03/31/07.  A review of all arms length sales within each neighborhood for the required study period is used to determine individual Assessed Values on a global scale.

The Taxable Value is the value to which the millage rate is applied, thereby determining your taxes.  The Taxable Value on the property is said to be "capped" if the property owner has not had any additions or losses on the property or did not purchase it in the preceding year.  The Taxable Value is calculated by adding the CPI or 5% (whichever is less) to the prior years Taxable Value.  Proposal A intended to put a cap on the Taxable Value of property so that taxpayers wouldn't be as affected by a strong economy and significant increases in valuation, the intention was to make changes to the Taxable Valuation more gradual by tying it to the rate of inflation.

Sales prices in my neighborhood have been decreasing.  Will my property valuation decrease as well?

If you've owned your property for a significant amount of time, it is likely that your SEV exceeds your Taxable Value.  If this is the case, a decrease in market value as determined by city sales studies, would result in a decreased assessed valuation and SEV.  The Taxable Value however, is required by the Michigan Constitution to increase each year by the rate of inflation or 5%, whichever is lower.  In the case of a long time property owner, the SEV should decrease, while the Taxable Value would increase.  The Taxable Value cannot be higher than the SEV.

How does that impact my tax bill?

Because the taxes are based on the Taxable Value rather than the SEV, even with a decrease in the SEV, the taxes could still go up.

I just bought my house.  Will the assessed value automatically be half of what I paid?

By state law, a home's Assessed Value is not half its purchase price, but half of its market value.  The study period and process identified in paragraph 1 is used to determine market values.

I feel the taxable value on my tax bill is too high.  How can I get my taxable value and amount that I pay changed?  Is there a deadline to do this?

In closing, please note:  I have a pdf download providing even more information on property taxes that you can read by clicking here.  Don't forget that you can challenge your taxable value with the assessor by writing them a short letter  or call requesting to be be heard before the tax board of review.  .  Do this right away after you get your new assessment because you do not have much time to protest.  Should the determination they mail you fail to provide the intended results, then you can ask your assessor for an appeal letter bebore the State tax tribunal.  Call me if you have more quetions.  If you need comps showing the sale price of similar properties, just drop me a note requesting them.  I would be happy to safe you money on your property taxes or otherwise.  I also have new home listings or a free market or cma reports on your existing property.


Why Your First Offer is Usually Your Best Offer

by Group One Realty Team - Real Estate One
There’s an old real estate rule of thumb that the first offer you receive is usually the best one. I’ve run into this with several listings where the seller received an offer early on, made a stiff counteroffer back to the buyer and the buyer headed for the hills. In some cases, as much as 18 months and several price reductions later, another offer finally came in only to be significantly lower than the first buyers’ offer.

While your first offer may not be what you were hoping for, it is a good idea to consider several things when choosing how to respond to that offer. Length of time on the market, time of year, initial asking price compared to the price recommended by your agent, and current competition should all be taken into account when determining whether to accept, reject or counter the first offer you receive.

It may be tempting to hold out for a better price, especially in the first few weeks that your Home is on the market when there is a high volume of showing activity. However, that activity typically wanes after about three weeks, at which point the buyers who have been waiting for "just the right house" will have already considered your property. Buyers rush to see new listings, and if it’s the best thing they have seen they will probably make an offer. Most of these buyers have been at it for a long time and know the values very well, in some cases understanding market realities in their price range even better than realtors who have been tracking a broad market. Therefore, an offer received in the first few weeks on the market is probably appropriate to current conditions and worth serious consideration. Comparing the offer to your realtor’s initial price recommendations can help you decide what action to take.

After the first several weeks, the activity that remains is buyers just entering the market. Since they are at the beginning of their house hunting, they generally have more time to look and are less motivated to act quickly. They are less educated about the market than those who have been shopping for a long time and will err on the side of caution when making their offers, especially in a buyer’s market. Consequently, offers will more likely be lower than early on.

Time on the market erodes value as well. The longer a house is listed for sale, the less interested buyers and Realtors are in the property. People will begin to wonder what is wrong with the property, and even if they like it will offer a lower price so they won’t lose money if they end up having to sell.

Be sure to consider the opportunity costs. While your first offer may be lower than you had hoped, every month you keep the property is another month you must pay mortgage, taxes, utilities, and insurance for a home you are hoping to leave. These costs can add up quickly and end up costing you more in the long run.
Time of year is another factor that can affect the offer. Your offer in March or April will most likely be much higher than in September or October. Sellers who were optimistic in the spring will be lowering their prices quickly to try and sell.

The bottom line is that you are never in a better position to get the best price for your home than when it is fresh on the market. Even if the offer and subsequent negotiations are less than you are hoping for, don’t kick yourself months or even years later wishing you had taken the offer. That real estate rule of thumb stays true: your first offer is usually your best.

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