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Fair Market Value May Not Be "Fair" ...or Not What YOU think is Fair

By
Real Estate Agent with EXP Realty 414-525-0563 57026-90 Broker

  Some people believe that the only way to define "Fair Market Value" is the price paid by a willing buyer to a willing Seller.....that would be a good definFair market valueition...IF that was the only definition for this term....but clearly....it is not. If you are a listing agent....and have been on any number of listing presentations...a prospective Seller may well have taken out the tax bill for the property and pointed to the little box on the bill...sure enough it says "Fair Market Value"...the prospective Seller already "knows" the "Fair Market Value...there itax billt is in black and white...the local governing body says so...the government MUST be telling the truth of course of course....or....."the truth is what you believe it to be."  Many homeowners will choose to believe that bill....and here it comes..However.  

     However...that "Fair Market Value" is not adjusted based upon the recent sale of your neighbors home...similar to yours...Reality is that it is not recent at all.  Like the "assessed value"...it may have little or nothing to do with the reality of the real estate market at any given time. The tax bill doesn't know the current supply and demand...it may not know...your roof blew off...or that you remodeled the kitchen or bathroom...or finished the lower level...It is a piece of paper that "knows" ....nothing.Higher fair market value

    If the government has "valued" the property higher than the reality of the market...that is sometimes what a homeowner will choose to believe.   If the market is fast paced, the inventory low....the location and condition great...a Realtor may find the "fair market value " to be higher than the number printed on the tax bill...and guess who is the credible source of "fair" to the homeowner then ? 

     Highest is NOT Best...OR Fair...what a homeowner may not think is "fair" is the most recent analysis done by a competent Realtor who prices a house to sell...not to sit ...not to have numerous price reductions or expire....but to sell for the highest and best the market has to offer.

    If you or anyone you know is looking to sell Wisconsin real estate for the highest and best price in southeastern Wisconsin...call the Hansons...we would be honored to be of service for all things real estate.

 

 

 

 

 

 

 

Posted by

Sally K. & David L. Hanson, ABR, CDPE, CSS, e-Pro,ILHM, REDS


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Comments (17)

Sybil Campbell
Fernandina Beach, FL
Referral Agent Amelia Island Florida

Sally K. & David L. Hanson,  It's sometimes hard for the general public to understand that the tax records are usually not true market value.

Aug 03, 2015 01:36 PM
TeamCHI - Complete Home Inspections, Inc.
Complete Home Inspections, Inc. - Brentwood, TN
Home Inspectons - Nashville, TN area - 615.661.029

 Good Tuesday morning Sally and David. I have to agree with Sybil's answer.  Folks do not understand real estate and they do not understand fair market value.

Aug 03, 2015 07:23 PM
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

Good morning Sally. The settling on a listing price can be a challenge as you well know, very emotional for a seller, it takes a lot of skill get to the right number and convince them it is the right price.

Aug 03, 2015 07:54 PM
Conrad Allen
Re/Max Professional Associates - Webster, MA
Webster, Ma, Realtor

Hi Sally.  Some sellers can be very unrealistic.  They have to be motivated

Aug 03, 2015 08:44 PM
Roger D. Mucci
Shaken...with a Twist 216.633.2092 - Euclid, OH
Lets shake things up at your home today!

The word in question here, IMHO, is "fair".....and now I'm taking the fifth.  Dewar's that is.....

Aug 03, 2015 08:46 PM
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Hi Sally and David.  Yes, maybe we should remove the 'Fair' from market value and use 'True'.  Though, people will still have issues understanding their values.

Aug 03, 2015 08:59 PM
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

I love the post. I hope home buyers and sellers will read it.

Aug 03, 2015 09:00 PM
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Real Estate Agents - Luxury - Divorce

Fait is not a really good term I agree Gabe Sanders....especially when the tax bill and the "true" value can be miles apart.

Aug 03, 2015 09:08 PM
Lawrence "Larry" & Sheila Agranoff. Cell: 631-805-4400
The Top Team @ Charles Rutenberg Realty 255 Executive Dr, Plainview NY 11803 - Plainview, NY
Long Island Condo and Home Specialists

The only way to get the fair market value of a home is to work with a trusted, and reliable Realtor who works in the market everyday. In WI, that would definitely be Sally & David Hanson! 

Aug 03, 2015 09:33 PM
Sheila Anderson
Referral Group Incorporated - East Brunswick, NJ
The Real Estate Whisperer Who Listens 732-715-1133

Good morning Sally and David. My first thought was nothing in real estate is fair. In my area, the assessed value is gennerally much lower than the market value.

Aug 03, 2015 10:25 PM
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Real Estate Agents - Luxury - Divorce

Shows to go you Sheila Anderson...real estate IS local for years during the downturn of the market...assessed here was always higher than "actual market value"...some areas have caught up...others have not.

Aug 03, 2015 10:56 PM
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

We don't re-assess the taxes on a sale or re-fi.  And taxes seem to be under the "market" value by quite  a bit . . . GOOD THING too!  Great explanation.

Aug 04, 2015 07:28 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Sally and David here in CT taxes are paid in most towns at 70% of the appraised value.  So I usually find that Sellers think the "Fair Market Value" of their home is much higher than what the tax bill says.  But Buyers on the other hand want to point to the tax bill bill as the "Fair Market Value".  In both cases they are wrong for all the excellent reasons you provided.

Aug 04, 2015 08:32 AM
Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

I would think the word "fair" is hard to define in any context.  Like some autographs are worth more than others, there are lots of factors that go into a house sale.

Aug 04, 2015 08:30 PM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Hi Sally K. & David L. Hanson ,

Our property tax valuations are always slow to catch up with the actual market value thus buyers like to point to it and seller's don't! With an appreciating market one has to look at the most recent sold properties to tell what fair market value really is..that is what the appraisers are doing.

Aug 04, 2015 11:19 PM
Debbie Reynolds, C21 Platinum Properties
Platinum Properties- (931)771-9070 - Clarksville, TN
The Dedicated Clarksville TN Realtor-(931)320-6730

Our property evaluatins are not accurate and when properties values declined they went up. If a person didn't protest they were just stuck.

Aug 05, 2015 10:52 PM
Ron Mast
www.RealHelpRealEstate.com - Colorado Springs, CO
Homes for Sale in Colorado Springs Colorado

Amen! I have been telling my sellers this for years, see very similar post at www.realhelprealestate.com.  Thanks for spreading the word!

Aug 09, 2015 04:19 AM