by Patricia Feager, 5/20/2018
In the State of Texas a CMA (Comparative Market Analysis) is an opinion of "an estimate of the probable selling price of a property." For this analysis, it is wise for sellers to use a local Real Estate licensee who can guide and determine a strategy for listing price. The advantage to the owner of the property is to see the active and sold competition within the immediate current and past three month scope. Knowing that sales are a moving target, an experienced Agent who knows the area and the business works with the Seller to adjust list price accordingly, if needed. Other factors to consider are as follows:
- Property Condition (Interior and exterior)
- Curb Appeal
- How it compares to similar homes in the neighborhood within 1 mile radius
- Taking probable consideration for availability of similar properties outside 1 mile radius
Why Use An Experienced Local Agent
- Overestimated list price contributes to price reductions
- Market Trends by on-line Real Estate databases, i.e., Zillow are guesstimates
- Perception of list price is subjective
- Sellers need to understand the objective logic for list price
- Gossip or on-line databases contributes to misperception, stress, and regret
- Nobody wants to leave money on the table at closing
How Does the Central Appraisal District Compare
A home owners property tax burden is decided by locally elected officials who estimate property taxes before property taxes are due. In the State of Texas, the Appraisal District (government body) decided on tax estimates using last year's tax rates for the taxing units on owners property. For example, Notices of Total Estimated Tax was mailed out in April with a deadline for filing a protest by May 18, 2018. If an owner did not make a protest or request a hearing (beginning May 22, 2018) than taxes will be based on the government entities total estimated Tax to be paid before December 31, 2018, or before the deadline stated on the tax bill before penalty charges are included.
How does Central Appraisal Districts Determine Market Value for Taxes
The Texas Property Tax Code, Section 1.04 defines market value for property taxes as follows: "Price for which a property would transfer for cash or its equivalent under prevailing market conditions if:
A) Exposed for sale in the open market within a "reasonable time to sell"
B) Knowledge by Buyer/Seller for use and purpose to which property is used with "enforceable restrictions"
C) Both Seller and Purchaser "seek to maximize their gains and neither is in a position to take advantage of the other"
It is important to know employees of an Appraisal District do not enter homes to determine condition. Taxes may be based on drive-by employees using cameras who do not get out of the vehicles to inspect properties for the entire county. The total assessed value is based on estimates on data available to the local government institution. A licensee by the State of Texas is an Independent Contractor sponsored by a Broker or is a Broker that represents the buyer and sellers in home sales trained in the business for helping consumers. Unlike a paid government employee, a licensee representing buyers and sellers only gets paid if a property sells depending on terms of the Listing Agreement.
For further information, for example how do Appraisers from Appraisal Management Companies differ when it comes to "Appraised Value" for borrowers, if you don't have a signed representation, let me know and we can consult further, or use your local Agent licensed by the State.