I received an email this morning from one of my buyer clients:
In some of the listings that I get there is a position called Taxable Value, which sometimes has a number, and sometimes it doesn't. Also, it is usually more than the List Price. What is that Taxable Value?
This is a great question, and one that comes up often in a buyer's home search. Let's break it down into sections.
First, the reason that there is sometimes a number and sometimes not is:
Taxable Value is a field in our MLS that is NOT required, so that is why you will not always see a number there. If the agent does not put it on the listing contract, it is public record and easy to find yourself. If the property is in Cedar Rapids, you will go to the Cedar Rapids Assessor Website at:
If the property is located outside of Cedar Rapids, such as in Marion, Hiawatha or Robins, but in Linn County, you will need to visit the Linn County Assessor Website at:
Second, the Taxable Value vs. the List Price:
Although most of the properties that you are looking to buy fall into the category of the list price being LESS than the Taxable Value, this is not the usual trend. Because you are looking at homes that are in short sale, or foreclosure, you will often see these values flipped. In a normal residential sale, the list price or market value, will be slightly higher, up to 10-15%, than the Taxable Value. This is especially true with properties that have been improved recently and the taxes have not yet been adjusted.
The above websites will give you all of the information that you need, including the Taxable Value Assessment for the last few years, so you can see if the property has been increasing or decreasing in value.
So lastly, What is Taxable Value?
The taxable value is the amount that the property is taxed. Meaning that you want your home to have the lowest possible taxable value. Taxes differ even within our city due to school district bonds, age of the homes, finished square feet, and size of your lot.
A few short years ago, it was much more common to see homes that were selling for 15% or more than the Taxable Value. This was before the decade adjustment that brought the values back into line in our county. In short, the taxable value has absolutely nothing to do with the appraisal or market value of a property. Some properties are over-taxed, meaning that due to the school district, the taxable value is much higher than what the home will sell for in the current market. This is where the homeowner can argue to have their taxable value adjusted lower based on recent sales in the area that they live.
Hopefully, this information will help you to understand what taxable value is and how it relates or does not relate to the market pricing of a home that you are considering. When you decide to purchase a home, I will go over the most recent sold comparables in the area to determine the best price to offer in the current market. We will discuss these in depth before making an offer as these same properties will be used by the lender's appraisal to determine the value of the home. Remember-You must have the appraiser's blessing in order to secure financing!
Please call me when you are considering purchasing a home and we will negotiate the best price for you in the current market!