Q. I have a question about appraisals and home values.
Our house is appraised for tax purposes at a lower value than the house next door, which has greater square footage. The houses were built on same-sized lots about 20 years ago. But our neighbor's house is dated inside, while ours has an updated kitchen and interior and updated bathrooms. In addition, our yard is professionally landscaped and well-maintained.
We are thinking of putting our home on the market for sale but wonder how real estate agents determine a listing price. How do comparables take into account condition of a home and yard, as well as location and square footage?
Also, the Zillow estimate for our property is less than our neighbor's. Won't prospective purchasers try to use Zestimate to negotiate a lower selling price, even though Zillow has never set foot in our home?
A. Don't worry too much about Zillow. Your best bet for an estimate of current market value and listing price is an experienced local real estate broker. It won't cost anything or obligate you if you consult two or three agents who are active in your neighborhood and take advantage of their expertise.
Your place sounds lovely, but if it's overimproved for the neighborhood, you'd better be prepared to hear that it might not bring as much as it would on a more prestigious street.
If your home is properly advertised so that a wide pool of potential buyers knows about it, you can trust the laws of supply and demand to produce true market value. Again, don't worry too much about Zillow.
Q. Since we've been married, we've owned our own home with no problems. But now we are changing to jobs in New York City. If we can afford to, we will probably be buying a condo or a co-op. We have no experience with these. What is the difference between them? Can you give us any tips on what to look out for? Any help will be appreciated.
A. Cooperatives are the older form of organization, found mainly in New York, Chicago and a few other places. When you buy one, you don't own any real estate. Instead, you receive shares in a corporation that owns the whole development and a proprietary lease on your own unit. You will be told ahead of time how much of your monthly payment will be income-tax deductible as your share of the overall property taxes and mortgage interest.
Because tenant-owners in a co-op development depend on one another financially, you may need approval by a board of directors. Find out how much of the building's mortgage you could be liable for in addition to any loan you would place to buy your own shares.
A condominium, on the other hand, involves a deed that gives you complete title to your unit "from the plaster in" and a percentage of the "common elements" -- the underlying land, staircase, driveway, elevator, roof, heating system. You own real estate, just as you own your present home, with your own mortgage and tax bill for your unit. In addition, you pay a monthly fee for outside maintenance, repairs, landscaping, recreation facilities and the like.
Before you buy either type, you should be furnished with a daunting amount of material to read. You are particularly interested in the following:
• The financial health of the organization you would be joining. Does it have enough money in reserve to cover major renovations and replacements?
• The condition of the building. Is it likely to need a new roof, elevators, boiler or windows, for which you would bear a share of responsibility?
• The covenants, conditions and regulations you must observe. Could you rent out your unit, paint your front door red, have a roommate under the age of 55, someday sell the unit on the open market?
• The percentage of owner occupancy. More owners and fewer tenants is the preferred situation.
Q. Do we really have to buy title insurance for our new home?
A. You do if your lender requires it. The lender wants it so that if someone were to ever challenge your right to ownership, it wouldn't be in danger of losing the money lent to you. You'd pay just a one-time fee.
For a small additional amount, you could buy an owner's policy at the same time. In the unlikely situation someone were to take you to court claiming the property really belonged to them, your investment would be protected.
• Contact Edith Lank on www.askedith.com, or 240 Hemingway Drive, Rochester NY 14620.
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