Dear Ms. Lank: My wife and I reside on a farm. The county full value assessment on our home and farm is $446,000.
We are in our 80s and do not have children interested in the property. Since maintenance may soon exceed our abilities, we will consider selling through a local agent.
I tend to regard the assessed value as the bottom line, below which I would not accept offers. What realistic circumstances can you think of due to which potential buyers could seek deductions from assessed value? Your advice has always seemed sound. I will welcome your reply. — B. L. G.
Answer: No matter how skilled the government assessor is, and no matter how carefully or how recently the estimate is made, the assessment figure on your property is still just an estimate. It may accurately determine your proper share of local taxes, but it should not be used as a guide for market value.
Your sale price will be determined by the buying public.
The whole appraisal industry can be summed up in three words: Buyers make value. Prospective owners will consider how much similar properties have sold for recently, what's special about your place, whether it will justify the financing they may need to arrange and how your farm compares with others on the market. They may end up offering more than your assessed value, or less.
When you put your place on the market, interview more than one local real estate salesperson before you list, and then rely on the pricing advice of the agent you choose.
Giving Away Land
Dear Edith: In your column, someone asked about land they couldn't sell and that no charity would take. I feel no piece of land is valueless. I hope they thought of the local Habitat for Humanity or a land trust. They might be able to repurpose it for something like a bird sanctuary. — M. D.
Answer: Good idea. I'll pass it on.
Dear Ms. Lank: Could you please explain the benefit, or lack of benefit, of having your house placed in a life estate? Does it really save it from Medicare? When you pass, do your heirs have problems getting rid of it? Is it necessary to place all assets in the trust, or is it possible to place only the house in it?
I have been told that in one area it costs only $125. But here, after calling around, I've been quoted prices of $600 to $1,200. Why the difference, even after I said it would just be the house?
Finally, how do you best market a house when you live in a highly desired town but your ZIP code is reflective of the neighboring less respected area? — D. P.
Answer: Sounds as if you've received some partial information from a friend or an ad. It's not clear if you're asking about a life estate or setting up a trust, and whether you're concerned about Medicare or Medicaid.
My guess is that you should go easy about a trust. They're excellent for some estates and cumbersome, or even harmful, for others. If I were an estate planner, I'd consider your whole financial situation before making recommendations.
But as for marketing your house, if you intend to use a broker, the broker will have experience. If you're advertising on your own, you should use the town name and let prospective buyers figure things out for themselves.
Starting to Look
Dear Edith: I'm planning to purchase a two- or three-bedroom family home approximately two years from now. I know I have time, but I would like to start looking and learning. There used to be listings in the newspaper, but that type of real estate is rarely published in my town now. Zillow wasn't anymore helpful. Am I just not looking in the right place? — D. Z.
Answer: Find the name of your local Association of Realtors and pull up its website. You'll find lots of information.
You're Just Renting
Dear Edith: It is impossible to own your own home in the U.S. because if you have paid off the mortgage, you think you own your home debt-free, but then you get a tax bill. If you don't pay the tax, the government will take your house and sell it.
So I say you are just renting your house from the government. It's sad but true. — R. C.
Answer: I would have thought you were sending that money to share the expense of maintaining local roads, police protection and the like. Interesting viewpoint, though. Thanks for writing.
Contact Edith Lank at www.askedith.com, at [email protected] or at 240 Hemingway Drive, Rochester NY 14620.