-- Answers to Questions About Real Estate Law
Money and real estate news you can use everyday

Real Estate Lawyer
Question of the Week
Tip of the Week
Recommended Books
Contact Sam

Confused About Property Values


By Ilyce R. Glink and Samuel J. Tamkin

Summary: A new property buyer is confused by the difference between property values and assessed values. Ilyce and Sam give the basics about home values.

Q: I moved to the Chicago area last summer from North Carolina and decided to rent a house until I figured out where I wanted to buy and got over the sticker shock: Itís a lot more expensive to rent in Chicago than in North Carolina.

But, hereís where Iím confused. When I looked up property values given by the Cook County Assessor's office, houses offered for sale at $500,000 have a value of under $200,000 at the Countyís office. Are offering values that inflated around here, or are the county assessment worthless?

Also, I'm puzzled at the significant differences in property taxes on what seem to be comparable properties in the same town.
(article continues below useful links)

A: Welcome to the wonderful world of real estate taxation. You have discovered one of the most confusing issues for homeowners nationwide.

In some parts of the country, the recent selling price for a home will set the assessment or value of the home for real estate taxes. Furthermore, in some parts of the country the value of the home may increase by a large amount but the assessorís value of the home will stay the same until the home is sold.

In the Chicago area and in some other parts of the country, the assessment of a home may be determined by a complicated equation as to the location of the home, the type of home in question, the homeís construction (brick or wood), the homeís lot size and age, the number of bedrooms in the home, and whether the homeís basement or attic is finished.

When you have an assessment process that uses factors other than the purchase price for a home, you may see strange results. While in practice homes in the same area that are about the same size should have the same assessment, they may not. In fact, their assessment could be thousands of dollars apart.

In these communities, it will be nearly impossible to figure out how an assessment was obtained for a home. In Chicago, this is particularly tough to figure since the market value accounts for typically not more than half the assessed value of a home.

Finally, when you look at different communities, taxes for similarly-priced homes listed by real estate agents may differ greatly. The difference, in part, may be as a result of how the tax collector determines the burden of taxes for homeowners.

In some cases, a community that has a large and profitable retail base or business base may pay a larger share of the taxes for the community. Homeowners benefit when retailers and businesses pay a larger share of the tax burden. Accordingly, if the community you are looking to buy a home in has almost no retail or business base, the taxes will be higher in that community for homeowners.

As for the difference between home values in North Carolina and the Chicago area, it is huge. But when you consider what you can buy in Chicago when you compare housing prices to the New York City area, San Francisco Bay area or Hawaii, Chicago housing prices might seem like a bargain.

Samuel J. Tamkin is a Chicago-based real estate attorney. Ilyce R. Glinkís latest book is 50 Simple Steps You Can Take To Sell Your Home Faster and For More Money In Any Market. If you have questions for them, write: Real Estate Matters Syndicate, PO Box 366, Glencoe, IL 60022 or contact them through Ilyceís website




RSS Feeds

RSS 0.91 Feed
RSS 1.0 Feed
RSS 2.0 Feed

Home Buying   Using Attorneys to Buy a Home - Earnest Money - Quitclaim Deeds - Easements - Seller Misreprensation - New Construction - Buying with Partners - Home Inspections - Seller Problems - Agent Issues
Home Selling    Using Attorneys to Sell a Home - Seller Disclosure laws - Title Problems - Buyer Problems - Real Estate Agent Issues - Tax Considerations
Home Ownership   Neighbor Problems - Seller Misrepresentation And Fraud Issues - Problems In a Condominium Development - Problems Around The House - New Construction Issues - Subdividing Land
Home Renovation   Architect Issues - Contractor Issues - Problems With Contractors - Inspection Issues - Certificate Of Occupancy - Municipal Inspections - Punch List Issues - Financing Issues - Installment Contracts
Real Estate  
Loan Application Problems - Refinancing Issues - Paying Off An Old Loan - Credit Problems - Seller Recommended Lender - Prepaying A Loan - Prepayment Penalties - Predatory Lenders
1031 Exchanges - Financing Investment Properties - Landlord and Tenant Issues - Partnership and Company Considerations - Tax Considerations - Subdividing Land
Contact Us | Sitemap | Terms of Use | Copyright ©2001-2005. ThinkGlink Inc. All rights reserved.
Reproduction of material from any pages without written permission is strictly prohibited.
Site design by Walker Sands Communications