A few years back, Indiana went from an assessment formula that no one could understand to a “Fair Market Value” assessment practice. This sounds good in theory. At least we can now somewhat understand why our taxes are what they are each year where using the old formula left everyone basically in the dark. But the new process has major flaws in our current market. Here are a few:
1) The market has changed so much in recent years, it has caused banks to limit appraisers to only use comparable home sales that have sold in the last 3-6 months. Considering the “Fair Market Value” approach to assessment uses much older data for figuring value and the process is way outdated before the taxes are even sent out. It is not really “Fair Market Value” but is presumed to be so.
2) Basing the “Fair Market Value” assessment on previous sales price and area sales can lead to some huge flaws in the system. For instance the abundance of foreclosed homes in some areas which sell far lower than “Fair Market Value” can substantially lower the assessed value of a home beyond what is reasonable. Most homeowners will not complain of course because the taxes then go down but having the assessed value too low in a State where the assessment is suppose to be fair can ultimately usurp equity from the seller when they go to sell or refinance the home. Here is what I mean:
Suppose I buy my home for $200,000. Keep it 10 years and then go to sell it. Each year due to market conditions, the assessment drops the value $5000 a year starting the year I bought it. In year 10 it has dropped $50,000 in assessed value. Now it is worth $150,000 per the assessor. I never complain as the assessment goes down because it is keeping my taxes lower but when I go to sell and prospective buyers look on Zillow or some other real estate value estimator that uses assessed value to help formulate a price value, the buyer does not want to pay my higher price. Even though assessed value really is not an indicator of appraised value, many buyers think it is.
3) Due to the shortage of comparable homes in our market because of the shorter window (3-6 months) that lenders are allowing appraisers to find comps, appraisers themselves are often using assessed value as a base figure when starting to appraise a property. While the previous convoluted assessment formula made no sense to anyone and therefore was not taken seriously as a means of determining true value, the current supposedly “Fair Market Value” system is often taken seriously by appraisers who don’t have other good recent comparables. I actually had an appraiser recently call me about a home I sold for $124,000 and before he ever even looked at the home, he said he was going to have trouble appraising it for the sales price because the assessment was only $112,000. That is crazy. The assessment was based on information that was 2 years old. What if the owners had completely remodeled the home since then? Would it still be worth the exact same in the eyes of the appraiser if it had new carpet, new kitchen, new bathrooms…etc?
Obviously no system is perfect for assessing property. But in an economy where equity is slowly being drained by foreclosures and job losses which prevent normal appreciation of property values, it is not a help to claim assessment is based on a fair value when in reality it usually isn’t. And it would be wise for homeowners to check out their taxes and assessments and let the assessor know when the assessment is wrong whether it is too high or too low. In the long run it may pay off much more handsomely.
The Orizon Real Estate, Inc mobile Ap is up and running folks! Go to www.orizonrealestate.com/m and pull up the Ap. You can find our open houses or simply map any home available in our area. It is a great tool and uniquely equipped to search the Fort Wayne, Whitley County and Kendallville markets and surrounding counties. Check it out today.
Hang in there folks. The Orizon Real Estate Mobile Ap is live now but still not fully functional. You can go to it to see our open houses but the mapping feature which will be a great search tool for you is not up yet. It should be ready any day now. The address is Orizonrealestate.com/m
The new Orizon Real Estate, Inc Mobile Ap is scheduled to go live within the next 24 hours if all goes according to plan! It will make smart Phone users a great search tool and a wonderful way to stay up with what is happening at Orizon Real Estate! Keep checking back at our site for more information!
On Saturday August 18, 2012, we had our 21st annual Pancake and Sausage Breakfast as a client appreciation/fund raiser. It was held at the Whitley County 4-H grounds and we were blessed with a gorgeous day.
As is our custom, Tim Brower and Brooks Langeloh arrived before dawn to fire up the cooker and we grilled over 400 Sausage patties. The customers raved about the flavor of the whole hog 3 to a pound pork treats. The rest of the crew were on hand before 6:15 AM and we started serving up food at 7! Sheri Millspaugh flipped pancakes all morning, Greg Fahl and Al Anderson waited tables and Ann Fahl (the event organizer) along with Eric Anderson, Kevin Ewing, Dale Delanoy, Angie Oliver, Ruby Brower, Linda Green, Jill Lane and Darlene Nelson all worked joyfully past the 10 AM closing time.
285 happy tummies were filled and many laughs and conversations filled the air over the 3 hour event. Let me just say it has been our privilege to serve breakfast to this wonderful community for 21 years and we want to thank Whitley County and the surrounding counties for Orizon Real Estate’s great success since 1978!
Hope to see you all next August for breakfast again as we will once again gather to raise money for our local Whitley County 4H!
In order to offer a better product to our web-site visitors, Orizon Real Estate, Inc will be undergoing a series of changes to our web site over the next month or so. The new features will include the following:
-A Mobile Ap to make the site smart device friendly
-A video section with interviews pertaining to the real estate industry in the markets we serve
-New look home page that is easier to navigate
-Easier search options
If we experience any down time as we transition to this friendlier site, please be patient. The final product will be worth the wait.
Ever see one of these and wonder what it is? About 25% of the consumers out there know and use these funny looking things a lot but the other 75% just glance at them and think, “What the heck have they come out with now?” Technology is changing so fast it seems we just learn how to answer our new smart phone and it is already in need of an upgrade so many have tuned out to learning any unnecessary new technology but the QR code may be beneficial to you.
The QR Code acts as a vehicle to take you from one source of information to another. Let me explain. Say you are looking at a magazine, newspaper, billboard, yard sign, business card or sales flyer and you have some information about the subject but you want more. If the merchant or salesperson includes a QR Code on the item you are viewing you can quickly scan the QR Code with your smart phone and that QR symbol will quickly take you to a web site that has more information about the product or person you are investigating.
In the real estate industry we are using the QR Codes on fliers and printed ads so people can quickly go from reading a 3 line house ad to watching a virtual tour of the home and get room sizes, addresses and more. All with the simple scanning of the ad. To use this process there are a couple things you must do:
1) You must have a smart phone of some kind that has internet access.
2) You must go to your Ap store that is already on the smart phone you own and you must download a scanner from your Ap store. There are free ones to choose from.
3) Once you have the scanner Ap, simply touch the Ap and it will open revealing a square or 4 corners of a square. You then line the corners of the Ap square up with the QR code you are viewing and it will drive you immediately to a web site that will give more details of the ad you were viewing. You can use the QR Code on this blog article as a test code!
It is that time of year again when visions of blue ribbon cows, tractor booths, ice cream, hot dogs, demolition derbies and hog auctions dance through my head. Yes it is the week of the 4-H fair in Whitley County and I must say this week is a blast for everyone.
26 years in the real estate business has taught me that if you are going to live in a rural community, there is nothing bigger or better than the week of the 4-H fair. We set up a booth every year at the event just so we can see everybody (and I do mean everybody) as they come strolling through the tents and barns with a big smile on their face and usually a big bowl of raspberry ice cream in their hand. People you have not seen since you graduated or since they bought their last home (or since the last 4-H fair) all stop in to say hi! What a great time!
I would encourage everyone who has a chance to get out to your local 4-H fair this year. It provides support for young people who are learning responsibility by raising animals, allows other young people to show off their artistic talent, and rewards kids and parents alike for getting involved in wonderful projects in this world so in need of wholesome activities. And then of course there is the other big plus to going to your county 4-H fair: It is a blast!
As the Heatwave continues to sweep across the mid west of the United States we are experiencing a lot of power outages and dangerous temperatures. Needless to say it is extremely uncomfortable for the folks who are experiencing a loss of air conditioning, refrigeration and even water in many cases. I have also noticed the effects on the critters around my property.
We happen to live in a wooded subdivision that has many residents among the bird, raccoon and stray cat families. Over the past two months we have seen the ditch areas all dry up and the trees begin to wilt for lack of water. We also see a lot of panting outside animals looking for a cool spot to lie down and a source of water. Perhaps you could make your home a safe haven for these little beasts.
It is wise to not get the wild critters use to coming up to your house for food and water because in a short time they will get use to it and you will spend half your day catering to them. But it is a kind gesture to take a large bowl of cool water to the far corner of your lot (perhaps along with some extra food scraps or pet food) and help them through this difficult weather. It is also a tough time on the birds right now so remember to keep your bird baths full (If you don’t have a bird bath an upside down trash can lid works great) and some bird seed or bread crumbs provide a great feast.
Just remember, we all need water, and in heat like this the animals don’t have the access that we enjoy. Thank you for your wonderful heart!
There is a new “flipping” rule that applies to some governmental loans including FHA loans that requires sellers who purchased a property and are “flipping” it, to be subjected to two appraisals before the home can be re-sold. It is only necessary under the condition that the seller is doubling their initial purchase price but still this rule is highly questionable.
The purpose of the rule is somewhat obvious. At least a portion of the housing meltdown is being blamed on lenders and investors who unscrupulously schemed to buy property, have it over-appraised, pull out the phantom equity and then sell the over-valued property to some unsuspecting victim. That was indeed wrong and those violators deserved punishment. But this new rule is a huge over-reaction.
First of all the market has changed dramatically since those schemes occurred. Appraisers are being so bombarded with rules and regulations now to the point it has forced many of the good ones to leave the industry. The ones who are still in are fighting a near impossible battle to find comparable properties 3 months old or less and they have someone looking over their shoulder constantly. There is little chance that a free-wheeling appraiser and a crooked lender and investor are going to try to pull off another scheme that will dupe an unsuspecting public.
Secondly, with all the foreclosures on the market, it is very possible now for an investor to buy up some properties fairly cheap, put some cash and sweat equity into the projects and double his/her money in a short time. That was quite unlikely 10 years ago because prices kept going up but now that they have been plummeting for a few years, the time is right for just such an investment opportunity.
So with all that being said, my original point is this: Why should these investors be subject to two appraisals before they can sell their property when they were not the culprits that caused the problem to begin with? The lenders are overly stingy now and the documentation they require is so laborious, it is apparent the loose lending policies are gone and the lenders have over-corrected the ship. The appraisers are running scared and in no way pumping up values they cannot justify. The only one who suffers now is the consumer. Buyers who often have little up front money have to pay for two appraisals at a cost of $300-$400 each. The seller who is just letting capitalism work by buying a home, fixing it up and re-selling it, is being subjected to a second appraisal and then must sell at the lower, not the higher.
The bottom line is that once again the consumer is getting the raw deal. Buyer and seller both suffer by rules that have been put in place to protect who? The very people who were responsible for the melt down!