The drop in interest rates is probably doing some good. But I know that where I bank, the interest rate for my savings is 2.25%. I'd probably do just as good if it was under my mattress.
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
Does anyone else see a conflict of interest with GCAR and the local town assessments here in Schenectady?
GCAR - the "Greater Capital Association of Realtors" is based in Albany, and is a combination of the Rens and Alb chapters. They are lobbyists for NYS, they even have their own PAC (Political Action Committee)
Quoted Text
The Greater Capital Association of REALTORS® represents real estate professionals from Albany, Columbia, Greene, Montgomery, Rensselaer, Saratoga, Schenectady, Schoharie, Warren and Washington Counties in New York State.
Quoted Text
# Participation in lobbying efforts of the National Association of REALTORS® and the New York State Association of REALTORS®. # Interaction with State and National legislators on issues affecting property rights and the Real Estate industry in general. # Contributions to the REALTORS® Political Action Fund (RPAC) and support of committee actions.
They also manage the Capital Region Multiple Listing Service (CRMLS).
These people, the ones with direct interest in the prices of OUR homes, are the ones setting the prices and valuations for tax purposes (good or bad for the homeowner).
Consider this scenario:
Jim Jones decides to sell his home, so he calls a REALTOR. The agent is a member of the CARMLS and can research, find homes and determine values for Jims current home. Now, say, for the sake of argument, the agent determines that, based on the values of properties sold around them, and the current market, Jim can get $125,000 for his house. Jim however isn't so happy, as he's "assessed" at (for example) $149,500. Jim has been paying taxes on $149k, but can only (realisticly) get $125 - MAYBE, and might have to settle for an offer less than that after inspections, time on the market, etc.
GCAR wins - it's another home sold through CRMLS and a "realtor". They also win because they've charged the town major bucks to complete the assessment on Jim's house. The town wins because they've been collecting inflated taxes for years. Jim (the resident, tax paying homeowner) is the only loser in this "game"
How is this valuation affecting the commercial property market? For instance, there's a building on upper Broadway, valued at $159k. It's listed for $59k - and no bites. The current owner is (supposedly) paying taxes on $159 (also the assessed value) - but there's no way he can sell it for that price. There's no parking lot, no green area, the building is essentially 4 walls.
Two questions really come to mind.
1. Are homes / businesses really selling for their listed price - and how different is the listed price from the town/city valuation? 2. Do homeowners realize that a real estate company (essentially an agency/lobbyist) placed the tax valuation on their home?
Perhaps Brad, or someone more familiar with the housing market can answer this question.
Excellent points Mobil! And how about this scenario.....When the stats come out from the government that states that housing sales are up, does that reflect just the NUMBER of home sold? How do we know that some or even most if not all of these homes were sold at a sub-valued price?
Just like you stated Mobil...are the home that they base these stats from being sold at the assessed price or a sub-valued price? Which would make a huge difference in the ACTUAL housing market crisis!
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
By JEANNINE AVERSA, Associated Press Tuesday, March 25, 2008
WASHINGTON -- Fighting to ease a dangerous credit crisis, the Federal Reserve has provided a total of $260 billion in short-term loans to squeezed banks since December to help them overcome credit problems.
The central bank on Tuesday announced the results of its most recent auction -- the eighth since the program started in December -- where commercial banks bid to get a slice of $50 billion in short-term loans. It's part of an ongoing effort by the central bank to provide relief to a spreading credit crunch that has unnerved financial markets. The situation threatens to push the country into a deep recession. Counting the latest auction results announced Tuesday, the Fed has provided a total of $260 billion in short-term loans to banks since December. In the most recent auction -- which marked the eighth -- commercial banks paid an interest rate of 2.615 percent, the lowest rate for any of the auctions of this kind conducted so far. There were 88 bidders for the latest slice of the $50 billion in 28-day loans. Demand was high. The Fed received bids for $88.9 billion worth of loans. The Fed, around the middle of December, announced it was creating an auction program that would give banks a new way to get short-term loans from the central bank and to help them over the credit hump. A global credit crisis has made banks reluctant to lend to each other, which has crimped lending to individuals and businesses. The smooth flow of credit is the economy's life blood. It permits people to finance big-ticket purchases, such as homes and cars, and help businesses to expand operations and hire workers. The ill effects of housing and credit problems, however, have made both people and businesses more cautious in their spending. And that has significantly weakened the overall economy. A growing number of economists believe the economy contracted in the January-to-March period and is on pace for its first recession since 2001. Across the Atlantic, European banks hungry for more cash received an additional $77.1 billion in short-term credit from the European Central Bank on Tuesday as part of weekly operations. The bank has jurisdiction over the 15-nations that use the euro as its currency.
I am in this line of work, so I'll try and briefly answer those two questions...
1) Yes and no. In this area, I see houses for the "Upper Middle Class" still selling respectively. High end homes, and starter-type homes seem to be more stagnant. First time home buyers and "flippers" seemed to be leading the market in Schenectady County (I don't have any data on hand to back this up, just making an observation), which is probably why this county has such a high rate of foreclosures now. Anyway, most homes are NOT selling for their original listing price as homeowners' minds are still stuck in the hot selling market and are determined to get what they feel their home is worth. Homes are sitting on the market much longer than in previous years. As far as commercial properties are concerned, yes they do effect each other. The "mortgage crisis" (Dislike this term) has only begun to affect this segment, so it remains to be seen what will come of it. I have my ideas (i.e. the **** will hit the fan), but that is better left for another thread. When there's a downturn in the market many people will find themselves with properties worth less than their assessment...which can then be argued down. The whole situation is much more complex then what I am describing here, but I don't think anyone wants to read a thesis on a message board.
2) Unfortunately, most homeowners are clueless is most aspects of real proeprty taxation, from levies to assessments.
Quoted from 147
Does anyone else see a conflict of interest with GCAR and the local town assessments here in Schenectady?
GCAR - the "Greater Capital Association of Realtors" is based in Albany, and is a combination of the Rens and Alb chapters. They are lobbyists for NYS, they even have their own PAC (Political Action Committee)
They also manage the Capital Region Multiple Listing Service (CRMLS).
These people, the ones with direct interest in the prices of OUR homes, are the ones setting the prices and valuations for tax purposes (good or bad for the homeowner).
Consider this scenario:
Jim Jones decides to sell his home, so he calls a REALTOR. The agent is a member of the CARMLS and can research, find homes and determine values for Jims current home. Now, say, for the sake of argument, the agent determines that, based on the values of properties sold around them, and the current market, Jim can get $125,000 for his house. Jim however isn't so happy, as he's "assessed" at (for example) $149,500. Jim has been paying taxes on $149k, but can only (realisticly) get $125 - MAYBE, and might have to settle for an offer less than that after inspections, time on the market, etc.
GCAR wins - it's another home sold through CRMLS and a "realtor". They also win because they've charged the town major bucks to complete the assessment on Jim's house. The town wins because they've been collecting inflated taxes for years. Jim (the resident, tax paying homeowner) is the only loser in this "game"
How is this valuation affecting the commercial property market? For instance, there's a building on upper Broadway, valued at $159k. It's listed for $59k - and no bites. The current owner is (supposedly) paying taxes on $159 (also the assessed value) - but there's no way he can sell it for that price. There's no parking lot, no green area, the building is essentially 4 walls.
Two questions really come to mind.
1. Are homes / businesses really selling for their listed price - and how different is the listed price from the town/city valuation? 2. Do homeowners realize that a real estate company (essentially an agency/lobbyist) placed the tax valuation on their home?
Perhaps Brad, or someone more familiar with the housing market can answer this question.
Sorry Mobile, after all my rambling I noticed I didn't directly answer the question! I do see your point, and see where you may be concerned about that. I do not consider it to be an issue, however and I'll make a few points why:
- In my mind, most realtors (I am not a realtor) are aiming for two things when they sell a home: 1) Sell it as quickly (quicker commission) and 2) Sell it high (more commission). Therefore, they are going to want to competitively price a home to sell as quick as possible and for as much as possible. Obviously the homeowner has final say in the selling price. The market is going to ultimately determine how much a home is worth. If the home is priced too low the market will, in most instances, bid the house up to its fair market value. In a depressed market with fewer buyers, there may be the occaisional homeowner who jumps at the first lowball offer, but most properties end up selling in an acceptable range of value. More often than not, a property is priced higher than fair market value anyway.
- As far as a town benefiting from an overassessed property, again, not likely in most instances. The affected homeowner loses out, obviously, but keep in mind a town is going to take in a pre-determined amount each year (tax levy). The assessment is only used to determine how much each person pays. A town (or whoever they hire) can assess all our properties at multiple millions of dollars, but the town will only take in more money if they a) increase the tax rate (or leave it unchanged in a reassessment) or b) raise the levy. Therefore its in a town's best interest to have a fair tax roll (fewer complaints). If the levy remains unchanged, one individual with an over-assessed property means there is another individual (or combination of multiple individuals) who are under-assessed and getting a tax break.
- An assessed value is a "snapshot in time" of a home's value, whereas the market itself is constantly moving. So in a hot housing market many homes will sell for above the assessed value (meaning an assessor, or hired gun, should increase the assessment at next reassessment) and in a poor housing market many homes will sell for below the assessed value (Meaningo an assessor or hired company should decrease its assessment at the next reassessment). In any event however, the homeowner should keep up with market trends, and use the recent sales data to argue his/her assessment if he/she feels they are overassessed in the current market.
I hope this better answers your questions as to how they may/may not affect taxes.
Quoted from 147
Thank you Possum - however I dont' see any answers to my questions about GCAR/CRMLS - and the effect on our taxes etc ... care to speculate on that?
Quoted from MobileTerminal: ... Perhaps Brad, or someone more familiar with the housing market can answer this question.
MT,
First, I am a New York State Licensed Real Estate Associate Broker. I am not a New York State Licensed Real Estate Appraiser. These designations/titles require different state-mandated formal training, knowledge, experience and licensing.
You are correct that there is a Greater Capital Association of Realtors, abbreviated GCAR, that operates in the Capital District region. ( http://www.gcar.com ). I can't speak to the GCAR that has contracted with several municipalities to perform property assessments. It makes sense that it may be the same organization, but in all honesty, I don't have involvement or knowledge in this area.
Licensed real estate appraisers estimate property values based upon several different appraisal methods; sales comparison approach, cost (of replacement) approach, and the income approach. Appraisers charge a fee for this service. Some Appraisers work directly for lenders.
Real Estate Salespersons estimate the value at which a property should be marketed for sale and the price at which a property is most likely to sell. Sales agents perform a comparative market analysis (CMA) by identifying similar properties that have recently sold, those that are currently being marketed, and those for which the marketing agreements have expired without a sale (often suggesting that the asking price was set too high).
A lender requires an appraisal upon which a lending decision can be made.
The web article at the URL provides a good explanation re: this topic.
As for the accuracy of property assessments and the use of these assessments by those in the real estate sales profession, I can speak only for myself. I personally don't place much emphasis on the assessments for the following reasons:
There are many municipalities in which property assessments have not been performed for many years (e.g., Duanesburg last reassessment in the early 1980s)
Property assessments in some areas are not at 100% valuations.
I have often found that assessment records are inaccurate, incomplete and/or obsolete.
Most importantly, the property transfer records often illustrate that the sale prices are inconsistent with the assessed property values.
All that said, I do consult the property tax assessment records to ensure that I have the correct data pertaining to the property (lot size, tax map ID, square footage, assessement, etc.)
The value of a property is defined as what the buyer is willing to pay and what the seller is willing to sell the property for. That is, the market, determines the value.
This definition was tested by me when I challenged an assessment years ago of a property that I owned. I had paid $115,000 for a property that was assessed (for tax purposes) at $125K. I submitted a copy of the sales documentation to the review board and pointed to a statement in the assessment guide that stated that the best indicator of the value of a property is the sales price if the sale was recent. I provided assessment records of other homes in the subdivision with descriptions of pictures of my home and how it differed from the others. It was stated by those on the assessment review board that the property may have been purchased in a "distressed sale" - which it wasn't. The result ... they "threw me a bone", reducing my assessment from $125K to $120K to get me to go away.
My experience, compared to that reported to Possum, is that I am presently working with many first time buyers in the $100K-$200K price range. My wife and I have also sold several high end ($500K+ price range) homes in the past 6 months. Those properties in between appear to me to be staying on the market longer. I would suggest that the selling prices are not asking prices, particularly for the homes in the mid to upper price ranges. There are more price reductions in the current market than I recall back in 2004 and 2005 when real estate prices in the Capital Region rose nearly 20% year over year.
As for your question/statement (below), a professional real estate salesperson/broker will present to the homeowner the CMA that was prepared for the listing presentation. It should include information that was used as input to determining a reasonable asking (listing) price. Of course, the property owner has the final word in setting the listing price.
I consider myself as a "lobbyist" only for the property owner (if I am representing the seller) or the purchaser (if I am a buyers agent/representative). Our greatest source of business comes from repeat customers/clients and referrals from those in our COI (Circle of Influence).
Quoted Text
2. Do homeowners realize that a real estate company (essentially an agency/lobbyist) placed the tax valuation on their home?
Does anyone else see a conflict of interest with GCAR and the local town assessments here in Schenectady?
Well Mobil, I guess you still didn't get your answer...I think.
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
They also manage the Capital Region Multiple Listing Service (CRMLS).
These people, the ones with direct interest in the prices of OUR homes, are the ones setting the prices and valuations for tax purposes (good or bad for the homeowner).
And is this in fact true?
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
Mobile, it sounds to me that you are confusing GCAR (Greater Capital Association of Realtors) with GAR Associates, ( http://www.garappraisal.com/ ) an Amherst based appraiser firm, that conducted Rotterdam's reval and is currently doing Niskayuna's too.
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