How to Lower your Real Estate Taxes

How To Lower Your Real Estate Taxes

We all pay taxes, we all pay too much. Unlike most taxes you may be able to lower your real estate taxes.
The property tax is a total of the various taxing entities that assess taxes on your property. These include counties, cities, school districts, and special districts. In many areas these taxes are collected by the local county and disbursed to other taxing entities.

Each taxing entity sets its own tax rates. You can attend the annual public hearing to voice your opinion on the tax rates, but this is not the best way. The taxing entity will set the rate based on how much money they think they need. Your protest is usually a waste of time.

Challenge Market Value to Lower Property Tax

Challenging the market value of your property, as determined by the county, is the way to lower your property tax. Each property is appraised and the tax rates applied to that appraised value.

By having the property value lowered, the taxes will be lowered. The county or city sets the property value which all the taxing entities use. They are supposed to use the actual value of the property but for a variety of reasons the value can be incorrect.

One Warning. If the county assessed value is less than the value of your property, count your blessings, and do nothing. On the other hand, if the assessed value is higher than the actual value you can do something about it, but do it the right way.

I have seen people approach a county and ask for their property taxes to be lowered. Their reason may be “I think they are too high” or “You raised them by 20%”, this won’t work. You need proof to force the county to lower the taxes. You need to prove the county assessed value is wrong.

Recent Closing Documents

If you purchased the property recently, use your closing documents. The documents show the purchase price, proving the county value is too high.

Property Appraisal to Prove Value

If you’ve owned it longer you need a property appraisal to prove the assessed value is high. The county doesn’t like to lower values as it lowers their tax revenue. Be firm and have your proof when presenting your complaint.

With the recent banking crisis and collapse of real estate prices it is likely your real estate taxes are too high. The county is required to assess property at actual market value. If you prove the assessed value is high the county is required to lower it, lowering your taxes. Use your recent closing documents or an appraisal to prove the county assessed value is high.

February 23, 2016

How to Calculate Real Estate Values

How To Calculate Real Estate Values

The most important step when buying or selling property is to decide the real estate values. I recently observed two land purchases. The two parcels of land were almost identical. Both were 10 acres of vacant land next to one another. The first parcel sold for $5,000.00; the second for $47,000.00. Almost 10 times more!

What was the difference? The first buyer paid a fair price after calculating the real estate values, the second buyer paid ten times what the property was actually worth because he didn’t.

Every piece of real estate is different and prices vary in different areas. It is impossible to say exactly what a piece of land is worth at any given moment. The best definition is “real estate worth whatever someone is willing to pay”.

However, the following tips will give you an idea of what specific types of land in a specific area are worth.

These 5 tips explain methods to discover approximate value of a parcel of land. Following these methods you won’t pay 10 times what it’s worth. When you buy you can know you paid a fair price.

Look at Recorded Deed to calculate Land Value

In most states the seller is required to include the real estate prices on the deed. The deed transfers the property to the buyer when recorded at the local recorder of deeds. This is usually a County Recorder.

When recorded these deeds are public record. You can visit the county and see what the property values were at the time of sale. Remember values vary depending on the economy and other factors. If the property sold some time ago the value could have changed.

Look at County Assessed Value

Counties assess properties (determine property value) for taxation purposes. Property taxes are based on the property’s market value. This is also public information and can give you an estimate of the property value.

Keep in mind that county assessed values often lag real market value by several years so assessed values won’t be exactly the same as market value.

Ask a Realtor for Property Values

An experienced realtor knows the property values in his area better than anyone. If you are working with a realtor make sure you are shown multiple properties.

Remember the realtor may be working for the seller and has an obligation to get the highest price possible. You can also ask a real estate broker to give you an estimate of real estate values for a fee. This is often called a BPO (Broker’s Price Opinion).

Realtor.com, Zillow.com and Trulia.com

Realtor.com, Zillow.com, and Trulia.com are three of the most popular websites listing property for sale. Asking prices are listed so you can research properties in your chosen area.

Remember this is the price the seller is asking for the property, not necessarily the real estate values. Most sellers assume they will lower the sales price in negotiating the sale.

Realtor Company Websites

Similar to the tip above, is the real estate company’s website. The real estate company’s website may list the properties they have for sale and usually have more details and pictures than the sites above.

Property appraisal or determining real estate values is not an exact science. Even two appraisers will not calculate the exact market value of land or real estate. The above tips will give you an idea of its value, and help you avoid paying many times what it’s worth.

4 Biggest Mistakes when You Buy Property. Paying too much for the real estate is the biggest of land buying mistakes. Every parcel of land is unique. You can’t “look up” the value, making it difficult to know the right price. This especially applies in Utah Real Estate as the previous sales price is not disclosed in public records.

9 Questions to ask Before Buying Land. When Buying Land your are making a big decision and a big investment. Go slow, ask questions, and learn everything you can about the property before you buy. Below are some of the important questions to ask.

Using a Real Estate Agent. Buyers and Sellers should find an experienced, trustworthy Real Estate Agent and let them guide you through the land closing process in Utah. A Realtor is your best friend during this process and will walk you through it from beginning to end. They will help you avoid many of the pitfalls and problems that arise when buying land.

January 30, 2016

Real Estate Agent – 6 Reasons to Use One

6 Reason to use a Real Estate Agent

Buyers and Sellers should find an experienced, trustworthy Real Estate Agent and let them guide you through the land closing process in Utah.

A Realtor is your best friend during this process and will walk you through it from beginning to end. They will help you avoid many of the pitfalls and problems that arise when buying land.

Sellers are also usually better using a Real Estate Professional. There are many possible problems with a sale and the agent can work through most of these.

The Real Estate Agent May Be Free!

The Real Estate Agent is paid a commission from the sale of the property. The commission is paid by the seller so buyers use a realtor for free.

Buyers don’t have to use the realtor who listed and advertises the property. Choose the realtor you want, the payment will be worked out between the two realtors, and you will have the realtors services for free.

Will Help You Find The Right Property

A Real Estate Agent has access to the local MLS (Multiple Listing Service) which lists all the property for sale by realtors in the area. Using the MLS the realtor can find properties that meet the buyers criteria and take you to those properties.

Many MLS’s are now listed on Realtor.com, where anyone can view them, but the realtor is an expert at using this information to find the land you are looking for. When selling the agents access to the MLS allows your property to be seen by many potential buyers.

Will Do the Work For You

The Real Estate Agent will do most of the work involved in finding and purchasing property, and finding buyers. A real estate purchase transaction is a complicated procedure which involves many details as well as many people. In most cases the transaction will be easier and much smoother if a realtor is involved in the process.

Will Help You Pay a Fair Price

One problem for buyers is paying too much for land. It is difficult to know what the land is really worth. Because Realtors deal with many parcels of land they know approximately what a specific parcel of land is worth.

In my line of work I have observed those who use a realtor usually buy land at a fair price. Keep in mind the realtor who listed a parcel of land has an obligation to sell for the highest price since they represent the seller.

Will Show You The Property

The Realtor knows the local area and will help you find the land you are looking for. Looking for land may involve driving down back roads without directions or street signs. The realtor will take you to the properties you want to look at, and the areas you want to look in.

Often a piece of land does not have an address or directions. Sometimes you will need to read legal descriptions and topographical maps. The realtor has experience in reading these and can take you right to the property, and show you the property boundaries.

Will Help You Avoid Many Problems

Using a Real Estate Agent will help you avoid many of the problems experienced in land transaction. Many of these problems don’t arise until after the purchase.

There are many possible problems, too many to mention, but include such things as: road issues, water rights, mineral rights, etc. Save yourself from many problems and use an experienced, trustworthy realtor.