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Financial Planning / Tax Strategies
|Subject: Re: Deemed Sale of Personal Residence||Date: 2/21/2001 9:35 PM|
|Author: JAFO31||Number: 46948 of 122521|
ldybrd: "Thanks for your $0.02, JAFO."
"Here in PA our homes are assessed for tax purposes periodically also ( though, not yearly). Our homes most often are sold for more ( but, no one minds NOT paying the taxes on a higher #). FMV implied to me what I could actually sell my home for. I did refinance 2 years back and recall( at your suggestion:) ) paying for an appraisal at that point in time. I'll need to locate a copy. Thanks again."
I have relatives in PA; I can vaguely recall that PA uses a "millage" concept and that reassessment was like every 4 years or 6 years and was intended to be at 50% of FMV. Do not trust my memory.
FMV - "The most probably price [that] a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming that the price is not affected by undue stimulus. Implicit in this defintion is the consummation of a sale as of a specified date and the passing of title from the seller to [the] buyer under conditions whereby:
(1) buyer and seller are typically motivated;
(2) both parties are well informed or well advised, and each is acting in what they [sic] consider their [sic] own best interests;
(3) a reasonable time is allowed for exposure in the open market;
(4) payment is made in terms of cash in U.S. dollars or in terms financial arrangements comparable thereto; and
(5) the price represents the normal consideration for the property unaffected by special or creative financing or sales concessions granted by anyone associated with the sale"
CFR, F.I.R.R.E.A. and the Uniform Standards of Professional Appraisal Practice
In addition, there are three approaches to estimating value:
Appraisal - Approaches 
Cost = land Value + Depreciated Improvements
Sales Comparison/Comparables - after adjusting for disimilar characteristics, including location, size, design and construction quality, age and other physical characteristics
Income = (Gross Income, adjusted for vacancy & collection) less Operatin Expenses)/ Capitalization Rate.
The third approach is rarely used for SF homes; the second approach is most common for SF homes and the first approach is sometimes used to validate the second appraoch for SF homes.
Hope this helps.
(who has read and reviewed far more appraisals than he cares to admit, especially in failed S&L offices after the deposit insurer took charge)
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