[BimmerPod]

Originally Posted by NemesisX

Honestly you really don't want a high appraisal on your home in the short term unless you plan on selling it very soon. An increased appraisal increases your property taxes.

Some people even seek professional help to lower their appraisal values as much as possible.

That $55k increase in appraisal value over asking price is bad news to you if you plan on living in this home for the long haul.

In CA - value/amount of property tax is assessed independently by the county, not the appraiser for the bank. No harm if financial appraiser writes down higher number as that's not what the county records will base their tax bill on

[NemesisX]

Originally Posted by BimmerPod

In CA - value/amount of property tax is assessed independently by the county, not the appraiser for the bank. No harm if financial appraiser writes down higher number as that's not what the county records will base their tax bill on

Oh interesting I didn't know that. Thanks for the clarification.

[ska///235i]

Originally Posted by gtron

it's 500k because 91001 is susceptible to mudslides and wildfires. slightly south of there the price jumps.

I hear you...its not all about the money. As long as it's your home, thats what make it special

[MrPrena]

I know Altadena is right next to LaCanada. I didn't know it was that cheap around that area. (I lived all over the LA County area).

For other state standard, yes. I agree with what you said.

No, appraiser's estimate is not what the price is, nor Zillow's estimate. The housing price is usually determined by how much your neighbor sells same/similar houses are x amount. Actual price would determine by the bid on your house when you sell. Congrats.

Originally Posted by FwdFtl

Wifey and I are in escrow for a house. I've been reading articles and doing some research about real estate in general. Here's my question:

Our lender uses their own approved appraisers and they valued our soon to be home at $55k over the asking price. Logically to me that would mean we instantly gained $55k in equity. Is this the case?

Also just to let you know how fortunate you guys are in other states, a 4 bdrm/2ba 1,600 sqft goes for around $500k in 91001. Our home was a flip, but it's turn key and pretty damn nice!

Any experienced advice would be much appreciated for us 1st time home buyers!

[Uber V8]

Originally Posted by BimmerPod

In CA - value/amount of property tax is assessed independently by the county, not the appraiser for the bank. No harm if financial appraiser writes down higher number as that's not what the county records will base their tax bill on

Man, I'm all confused now!

I'm reading both sides of the story on this. I'll find out myself if this is the case. What you're saying sounds like the best case scenario. I'd pay taxes on what the LA county determines the value of my home, but I could sell at or around the appraised value?

We plan to stay for about 3 years and see how the market is then. Either refinance or sell.

[kscarrol]

Right but from the bank's perspective, the home is worth $55k more so, at least in theory, they should be willing to lend against that value. That may not be the case in reality....

[Uber V8]

Originally Posted by MrPrena

I know Altadena is right next to LaCanada. I didn't know it was that cheap around that area. (I lived all over the LA County area).

For other state standard, yes. I agree with what you said.

No, appraiser's estimate is not what the price is, nor Zillow's estimate. The housing price is usually determined by how much your neighbor sells same/similar houses are x amount. Actual price would determine by the bid on your house when you sell. Congrats.

How cool man! Never thought I'd meet someone on here that's even familiar with Altadena!

You must be well off because what you call cheap, I call pretty expensive. I don't know too many late 20 year olds that can put down $100K cash for their first house (with no help)...but then again I grew up in the hood

Seems like some laws and regulations may vary based on county and state.

[Uber V8]

Originally Posted by kscarrol

Right but from the bank's perspective, the home is worth $55k more so, at least in theory, they should be willing to lend against that value. That may not be the case in reality....

That's what it sounds like is the case. For example, If my credit union says my house is worth $100k but I really paid $50k, then in essence I can borrow the difference against what MY bank says it's worth.

Once again, that's just my logical assumption. I'm new to this.

[CreoUCLA]

On a new home purchase, the bank/lender will use the lower of the sales price or the appraised value. If you're putting a 20% down payment on a $500,000 purchase price ($400,000 loan amount), and your appraised value comes in at $555,000, the bank/lender will still go based off the $500,000 purchase price (since that is lower). If you refinance later, then you can use the appraised value itself (which will hopefully gain equity).

Like BimmerPod states, property taxes are assessed by the County in CA. You are re-assessed by the County when you purchase the home.

Any loans these days being sold to Fannie Mae/Freddie Mac must adhere to Appraiser Independence Rules where no sales, production, or anyone that has a financial interest in the loan can select the appraiser (to avoid coersion of value). The bank/lender typically has an appraisal desk or staff that selects from an appraiser panel or outsource to Appraisal Management Companies (who then assign the appraiser directly to avoid the direct connection). We more commonly see properties appraised lower than expected, and then having to provide rebuttals trying to get values up.

[W Cole]

Originally Posted by bolinp78

An increased appraisal at this point is not a good thing, it likely means that your property taxes will increase. Looks like you might need to hire someone on contingency that will fight the city to get your appraisal down. They aren't hard to find.

Everyone who keeps saying the appraisal will affect property taxes is wrong.

California adopted proposition 13 many decades ago which dictates property taxes are reassessed upon sale based on the purchase price of your home and the millage rate in your area plus any special assessments. Per proposition 13 the assessed value of your home may not increase by more than 2% per year.

The only time an appraisal will come into play is if you apply for a prop 8 reduction.

[W Cole]

Originally Posted by BimmerPod

In CA - value/amount of property tax is assessed independently by the county, not the appraiser for the bank. No harm if financial appraiser writes down higher number as that's not what the county records will base their tax bill on

All counties reassess taxes the same way based on prop 13. Some have higher millage rates than others. Millage rates will vary by tax rate area within each county and city.

[W Cole]

Originally Posted by kscarrol

Right but from the bank's perspective, the home is worth $55k more so, at least in theory, they should be willing to lend against that value. That may not be the case in reality....

It will not be. They lend the lesser of contract price or appraised. If you try to refinance within a certain time period (12 months?) even if your property appraised higher than your purchase price a bank will only lend up to the original purchase price.

[MrPrena]

Oh no. Cheap was relative.

"woo, that 2014 911 GT3 for $110k? That is cheap!"
"oh my! that 1999 Avalon w/ 190k miles for $10,000? that is expensive!"

By all means, my house is worth less than that. That is why I do not buy houses in CA or even some areas in CO like Pitkin, Boulder, Eagle, etc.

Putting down $100k by your own at age of 20 is impressive. I don't think I could've done that at that age.

Originally Posted by FwdFtl

How cool man! Never thought I'd meet someone on here that's even familiar with Altadena!

You must be well off because what you call cheap, I call pretty expensive. I don't know too many late 20 year olds that can put down $100K cash for their first house (with no help)...but then again I grew up in the hood

Seems like some laws and regulations may vary based on county and state.

[Nkc]

FwdFtl is 20, married and buying his first house with $100k down? Now that is fucking impressive son! Rock on brotha!!!

[128Convertibleguy]

Originally Posted by FwdFtl

Seems like some laws and regulations may vary based on county and state.

Understatement, particularly with residential real estate.

There's also the delightful matter of home improvements and local permitting. That varies from place to place, time to time, and inspector to inspector.

Welcome to the game, first time homebuyer. <smile>

[kevinbahnz]

Congratulations and that is impressive. So what you got for me ? haha j/k.

[gtron]

Originally Posted by Nkc

FwdFtl is 20, married and buying his first house with $100k down? Now that is fucking impressive son! Rock on brotha!!!

Originally Posted by MrPrena

Oh no. Cheap was relative.

"woo, that 2014 911 GT3 for $110k? That is cheap!"
"oh my! that 1999 Avalon w/ 190k miles for $10,000? that is expensive!"

By all means, my house is worth less than that. That is why I do not buy houses in CA or even some areas in CO like Pitkin, Boulder, Eagle, etc.

Putting down $100k by your own at age of 20 is impressive. I don't think I could've done that at that age.

pretty sure he said late 20's. still a very nice job at any age imo.

[CreoUCLA]

Originally Posted by W Cole

If you try to refinance within a certain time period (12 months?) even if your property appraised higher than your purchase price a bank will only lend up to the original purchase price.

Depending on the bank/lender, many will allow the use of the appraised (current market) value for a rate & term refinance these days without a seasoning period, as long as the value is supported (i.e. strong appraisal with good comparables, home improvements made, purchased as a distressed sale, etc.).

On a cash out refinance, however, you usually have to wait at least 6 months (or meet additional guidelines like inheriting the property or delayed financing exceptions).

[Uber V8]

Originally Posted by W Cole

Everyone who keeps saying the appraisal will affect property taxes is wrong.

California adopted proposition 13 many decades ago which dictates property taxes are reassessed upon sale based on the purchase price of your home and the millage rate in your area plus any special assessments. Per proposition 13 the assessed value of your home may not increase by more than 2% per year.

The only time an appraisal will come into play is if you apply for a prop 8 reduction.

Yes, just read about this last night. I believe Prop 13 also "locks in" the tax rate for the duration of that loan period. Once again, could be wrong.

Originally Posted by MrPrena

Oh no. Cheap was relative.

"woo, that 2014 911 GT3 for $110k? That is cheap!"
"oh my! that 1999 Avalon w/ 190k miles for $10,000? that is expensive!"

By all means, my house is worth less than that. That is why I do not buy houses in CA or even some areas in CO like Pitkin, Boulder, Eagle, etc.

Putting down $100k by your own at age of 20 is impressive. I don't think I could've done that at that age.

I figured you meant relatively cheap. The reason I still think it's not cheap in the 91001 area is our house was a bad example. We actually got a really great deal. Comparable houses in that area are going for $650K+

For example, check this one out:

http://www.redfin.com/CA/Altadena/74.../home/22850489

Not too much bang for the buck if you ask me.

Originally Posted by Nkc

FwdFtl is 20, married and buying his first house with $100k down? Now that is fucking impressive son! Rock on brotha!!!

Haha, I'm actually newly turned 30, but my wife is 28. Nonetheless, thank you!

I've always gone by the quote from Dave Ramsey "Live like no one else, so you can live like no one else"

I believe that mindset has helped us get this far...plus a few nice music deals

Originally Posted by 128Convertibleguy

Understatement, particularly with residential real estate.

There's also the delightful matter of home improvements and local permitting. That varies from place to place, time to time, and inspector to inspector.

Welcome to the game, first time homebuyer. <smile>

Thanks for having me, I plan to play this game into the millions.

Originally Posted by kevinbahnz

Congratulations and that is impressive. So what you got for me ? haha j/k.

Thank you sir! We will be hosting our house warming in a couple months, come thru with the a nice bottle! haha

Originally Posted by gtron

pretty sure he said late 20's. still a very nice job at any age imo.

I did! but I'm really 30 now. Sad to think the 20's are behind me now, but hey great way to start off 30!

[Bobble]

Bought and sold 10 homes in SD/OC counties in the last 25 years. In short what WCOLE, BimmerPod and CREO say are the facts in Cali. Your Prop 13 value will be your assessed value at closing by the county, they can only raise 2% per tax year. As far as a Home Equity line, the decent ones only loan on amount above a 20% equity value and often only a portion of that. Might not be able to get the whole 55K as an equity line. Congrats on buying it's usually a good investment long term, if your only planning on 3 years only I'd keep the improvements to a minimum and no equity line IMO.

[W Cole]

Originally Posted by FwdFtl

Yes, just read about this last night. I believe Prop 13 also "locks in" the tax rate for the duration of that loan period. Once again, could be wrong.

Prop 13 caps the tax increases for the entire time you own the home. If you are over 65(?) you can even transfer your basis to a new home. The idea is to prevent older people with fixed income from losing their homes due to a large increase in taxes.

The assessor does not care whether or not the property is encumbered with a loan.

[Uber V8]

Originally Posted by W Cole

Prop 13 caps the tax increases for the entire time you own the home. If you are over 65(?) you can even transfer your basis to a new home. The idea is to prevent older people with fixed income from losing their homes due to a large increase in taxes.

The assessor does not care whether or not the property is encumbered with a loan.

Ok, I see. Good to know