I get asked quite often about how taxes for a particular home are calculated. So much so that recently I arranged a meeting with one of the County's tax assessors to ask how it's done. This brief meeting left me with more questions than answers...
So the other day a made a copy of my home's tax assessment and set about trying to understand all of the calucaltions. (This information is open to the public at the tax assessor's office in the basement of the "old" courthouse in Hollidaysburg. In fact, tax assessments can be appealed and, in some cases, lowered to reduce your taxes if they are unfairly high. Tax appeal time is in September every year, so make sure you fill out the proper appeal form in August to schedule your meeting.) Anyway, back to the purpose of this blog...
Your home's assessed value is based on its square footage and its replacement value, anything considered an "upgrade" will raise your taxes. In fact, I think the main reason you have to apply for a building permit is so that the tax assessor knows when you've improved your house so he can raise your taxes. Upgrades would be brick or stone exterior, finished basement, cedar shake shingles, hwd or tile flooring, finished attic, radiant floor heating, enclosed and finished porch, and so on. If you think your taxes are too high because someone you know has lower taxes, compare the two homes closely, inside and out.
Age and condition are also major factors in determining taxes. Identical houses built many years apart will not have the same assessment value because the tax assessor devalues houses the older they get. This is why new construction always has higher taxes.
Location, to a small extent, affects taxes too. Each of the 22 municipalities in Blair County have different millages. I don't consider this very important because I've never heard of anyone wanting to live in "X" township because the taxes are lower, and because their isn't that big of a difference from the lowest to the highest taxing body anyway.
So I hope I answered some questions. You can always call me...
John
Wednesday, January 30, 2008
Thursday, January 17, 2008
Take Advantage of the Market--Upgrade Now!
“We’d love to get a bigger place, but I think we’ll wait until the market improves.”
I’ve heard that statement several times lately, and it occurred to me that maybe now is when you should upgrade because the market is soft. Let me explain (put your math hats on, please).
For many years in this market, homes sold for 95% of their list price, on average. In other words, homeowners were giving 5% discounts. A lot of these homeowners, then, became home buyers, and, on average, would pay about 95% of the list price for their new home.
Mathematically it looked like this:
Old House
Listed For $100,000
Sold For $90,000 (%5 discount)
New House
Listed For $200,000
Bought For $190,000 (5% discount)
Difference: $190,000 - $90,000 = $95,000
The Advantage of a Soft Market
Now let’s take a look at what’s going on right now. I’ll agree that it’s more of a buyer’s market—homeowners, in many cases, are giving discounts of 10% or more. As you can see, that’s not all bad for those of you who are upgrading or wanting to build a new home:
Old House
Listed For $100,000
Sold For $90,000 (10% discount)
New House
Listed For $200,000
Bought For $180,000 (10% discount)
Difference: $180,000 - $90,000 = $90,000
These folks had to give a 10% discount to sell their old house, but got the same discount when buying their new one. And since they were upgrading, the discount on the new house gave them a greater dollar amount, thus they “saved” $5,000. (By the way, this opportunity applies to those of you who want to build a house too. The new construction market is even softer than the existing home market.)
Not only can you take advantage of this market to save some money during your upgrade, you have a better shot at buying your new home using a sale and settlement contingency. This type of contingency allows you to get out of the contract on the new home (with your deposit) if you cannot find a buyer for your old home. In hot markets, most homeowners will turn down an offer with a sale and settlement contingency because they know that another offer will be coming soon without one. In slower markets like this one, many homeowners are glad to just get an offer and will accept the contingencies.
We all know what happens when the market is hot: you find a great house, but so do three other people. Then you feel obligated to offer a little bit more than you would have if you were the only buyer. Or, you keep finding the perfect house, a day after it went under contract. So, if you can find the house you want at a significant value, don’t hesitate to make the move.
I’ve heard that statement several times lately, and it occurred to me that maybe now is when you should upgrade because the market is soft. Let me explain (put your math hats on, please).
For many years in this market, homes sold for 95% of their list price, on average. In other words, homeowners were giving 5% discounts. A lot of these homeowners, then, became home buyers, and, on average, would pay about 95% of the list price for their new home.
Mathematically it looked like this:
Old House
Listed For $100,000
Sold For $90,000 (%5 discount)
New House
Listed For $200,000
Bought For $190,000 (5% discount)
Difference: $190,000 - $90,000 = $95,000
The Advantage of a Soft Market
Now let’s take a look at what’s going on right now. I’ll agree that it’s more of a buyer’s market—homeowners, in many cases, are giving discounts of 10% or more. As you can see, that’s not all bad for those of you who are upgrading or wanting to build a new home:
Old House
Listed For $100,000
Sold For $90,000 (10% discount)
New House
Listed For $200,000
Bought For $180,000 (10% discount)
Difference: $180,000 - $90,000 = $90,000
These folks had to give a 10% discount to sell their old house, but got the same discount when buying their new one. And since they were upgrading, the discount on the new house gave them a greater dollar amount, thus they “saved” $5,000. (By the way, this opportunity applies to those of you who want to build a house too. The new construction market is even softer than the existing home market.)
Not only can you take advantage of this market to save some money during your upgrade, you have a better shot at buying your new home using a sale and settlement contingency. This type of contingency allows you to get out of the contract on the new home (with your deposit) if you cannot find a buyer for your old home. In hot markets, most homeowners will turn down an offer with a sale and settlement contingency because they know that another offer will be coming soon without one. In slower markets like this one, many homeowners are glad to just get an offer and will accept the contingencies.
We all know what happens when the market is hot: you find a great house, but so do three other people. Then you feel obligated to offer a little bit more than you would have if you were the only buyer. Or, you keep finding the perfect house, a day after it went under contract. So, if you can find the house you want at a significant value, don’t hesitate to make the move.
Friday, August 17, 2007
Flipping Houses: TV versus Reality
One reason why home improvement shows are so popular on TV is that the folks on the shows make it look so easy. But what the TV shows don't show you is all of the planning and organizing that's done way before the first hammer is swung that make a successful flip.
For every profitable flip you see on TV there are a hundred that didn't work out. I can point to several houses on the market right now in our area that started out as flip houses, but are now incomplete projects.
Just wanting to be successful is no guarantee. And working hard doesn't always make up for mistakes. The most important part of flipping houses is knowing what the finished home will sell for, regardless of how fancy you remodel the house.
This is very important to understand: Blair County is not Southern California or Phoenix or Miami. A 3 bedroom 1 bath house in good condition in a $60,000 neighborhood will sell for $60,000. Period. That same house with granite countertops, a jetted tub, custom made cabinets, and new turf in the yard will still sell for $60,000.
There's good money in flipping houses around here (I know this personally). Use a realtor to give you good advice on what to pay for the house, what buyers would like to see in the house, and what a reasonable selling price would be. Then do the math: get good estimates on the work and see if there's any profit in the house.
Better yet, call me if you want to give it a try!
For every profitable flip you see on TV there are a hundred that didn't work out. I can point to several houses on the market right now in our area that started out as flip houses, but are now incomplete projects.
Just wanting to be successful is no guarantee. And working hard doesn't always make up for mistakes. The most important part of flipping houses is knowing what the finished home will sell for, regardless of how fancy you remodel the house.
This is very important to understand: Blair County is not Southern California or Phoenix or Miami. A 3 bedroom 1 bath house in good condition in a $60,000 neighborhood will sell for $60,000. Period. That same house with granite countertops, a jetted tub, custom made cabinets, and new turf in the yard will still sell for $60,000.
There's good money in flipping houses around here (I know this personally). Use a realtor to give you good advice on what to pay for the house, what buyers would like to see in the house, and what a reasonable selling price would be. Then do the math: get good estimates on the work and see if there's any profit in the house.
Better yet, call me if you want to give it a try!
Wednesday, July 18, 2007
Location, Location, Location
It may be a tired, worn-out phrase in my profession, but "location, location, location" is worn out for a reason--it's everything in this business.
I recently helped a couple move to this area from the Midwest. Since they had no children, the school district was not a consideration for them. And since both were self-employed with an internet business, work location was also not a factor. Just about any house in their price range would work. Sounds easy right?....
Well, we looked at houses for weeks from one end of the market to the other. Since just about any house in the price range would work, just about EVERY house in the price range seemed right. It was very frustrating for them to decide. The ironic thing was that once they did find the right home, the biggest factor they cited on why they chose this home was "because of the area".
Even if you're moving within the zip code, it makes things easier to settle on a street or neighborhood. Even if you don't have children, the person who will buy your home when you eventually move on may, so schools should still be considered.
Location should also be a top consideration for investors too. Just because it's a rental doesn't mean that renters will live in a bad area. In fact, renters will pay more and will stay longer in apartments in nicer areas.
And location makes it easier to sell the "flip houses". Don't be tempted to buy that fixer-upper just because it's cheap. If you can't sell it (because it's in an "iffy" area), it doesn't matter what you paid for it--you paid too much! It is so much easier to sell a nice house in a nice area than it is to sell a nice house in a poor area.
I recently helped a couple move to this area from the Midwest. Since they had no children, the school district was not a consideration for them. And since both were self-employed with an internet business, work location was also not a factor. Just about any house in their price range would work. Sounds easy right?....
Well, we looked at houses for weeks from one end of the market to the other. Since just about any house in the price range would work, just about EVERY house in the price range seemed right. It was very frustrating for them to decide. The ironic thing was that once they did find the right home, the biggest factor they cited on why they chose this home was "because of the area".
Even if you're moving within the zip code, it makes things easier to settle on a street or neighborhood. Even if you don't have children, the person who will buy your home when you eventually move on may, so schools should still be considered.
Location should also be a top consideration for investors too. Just because it's a rental doesn't mean that renters will live in a bad area. In fact, renters will pay more and will stay longer in apartments in nicer areas.
And location makes it easier to sell the "flip houses". Don't be tempted to buy that fixer-upper just because it's cheap. If you can't sell it (because it's in an "iffy" area), it doesn't matter what you paid for it--you paid too much! It is so much easier to sell a nice house in a nice area than it is to sell a nice house in a poor area.
Monday, July 2, 2007
It Ain't As Bad As You Think
Ahhhhhhh!!!! I'm tired of hearing how bad real estate is around here. It's not! According to data in our local Multiple Listing Service, the average home sale price in Blair County has increased 6% in the last year. INCREASED 6%!
Blair County is such an isolated market that many times what goes on in other markets never does happen here.
The problem that were ARE having in Blair County is low inventory. There are less homes for sale right now than in years past. And I think it's because everyone thinks that their home will not sell or will not sell for a fair price because the "market's down".
I can't tell you how many buyers I represent that cannot find a good home. Nice homes are few and far between at a time of year when it shouldn't be this hard to find one. It's very frustrating as an agent....
So....
If you are putting off moving because you believe what you hear and read, call me. I'll give you the straight dope.
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