Posts from September 2021

Assessment Value vs. Market Value & Why Understanding The Difference Matters

We have been receiving questions about assessment value on properties, particularly as homes are selling for higher and higher values. It can certainly be confusing, but there is a difference between market value and assessment value, and we're here to help clear it up!

First, let's define assessment value and market value. Assessment value is the amount that a home is assigned for property tax purposes. We reached out to the Knox County Auditor's office to learn more about the process of assigning this value to a property, and they were very helpful! Every three years in Knox County, a property's assessment value is evaluated and updated. But what does that look like?

Well, every six years, properties are evaluated and updated on an individual basis. Every three years, the market itself is evaluated, and values are updated. So, the assessment value of a property gets updated every three years.

It's important to understand that an auditor does not enter the property being evaluated. They rely on MLS data that has been published in the past, including published photos. This information is especially helpful for them to get an idea of added finished living space— think finishing a basement or an attic, as that would certainly add value to the home.

Per Ohio revised code, the assessment value cannot exceed 90% of its actual market value. With market conditions as they are currently, the Knox County Auditor's office believes that percentage looks more like 70% in the county, and there is a lot variation between individual properties.

You're probably getting the idea by now that assessment value and market value are not the same thing. In fact, assessment value doesn't really matter much in the market, it really only matters for property tax purposes. Market value, however, matters a great deal because it is what an individual is willing to pay for the property. For this reason, when you're evaluating a listing, market value of comparable listings is much more relevant data than assessment value. So, why is there confusion?

The assessment value of a property is public knowledge— it can be found on the Auditor's website. For some buyers, this can feel like helpful information when evaluating whether or not they would like to pursue an offer on a property, as well as how much to offer for it. And it is helpful information, just not in the way you might think. It's helpful because it gives you the ability to forecast your future tax payment, it's not helpful as evidence that a property is over-priced. The reality is that this market is still competitive, and buyers are willing to pay much more than the assessment value for a property (and remember, that value is often only up to 90% of the property's actual market value).

Might other buyers be overpaying for properties? Possibly. If they are, though, it's for an entirely different reason than the fact that the assessment value and the asking price don't match up.

So when you see the assessment value of a property you might be interested in, remember that this value might be somewhere around 70-80% of the market value (if you're in Knox County). If you're questioning the value of the property, the best way to find clarity is to ask your agent to perform a Comparitive Market Analysis (CMA) to see what other individuals are paying for similar homes in the area.

I hope you find this information helpful! We would love to hear from you, so don't hesitate to reach out with any questions you may be having about the current market!

Until next time,
Cassie Johnson
Key Realty - John Yoder Team

My Three Go-To Breakfasts in Mount Vernon

Are you new to Mount Vernon? Living there for ten years, I was able to see local business explode! Our little town now offers big ideas when it comes to locally sourced and produced goods, and it's hard to beat the food in town. Being away for a month now has me missing breakfast in particular, and Mount Vernon is not short on fantastic morning options!

So here are my three, never fail, go-to breakfasts in Mount Vernon.

1. Best on-the-go breakfast: Half Baked Cafe. Honestly, I have not had a pastry here that I didn't like. My favorite Saturday morning routine was to stop at Half Baked Cafe for a quiche before heading to the Farmer's Market. All of the quiches are delightful and buttery, but there are usually some out-of-the-box flavor combinations from the mind of Chef Navin that you won't regret trying. I also grab some macarons or their baklava because, in my opinion, dessert can be breakfast (and I'll fight on this).
   Located: 3 W High Street, Mount Vernon, OH 43050
   Hours: Wednesday-Saturday, 8:00 AM-2:00 PM
2. Best Traditional Breakfast: North Main Cafe. This cafe is so cozy, and their food is so good! Drawing on amish recipes and traditions, their breakfast options are delicious, filling, and budget-friendly. The baked oatmeal is highly lauded in the community for good reason, and the gold rush bowl deserves an honorable mention. It gets busy on weekends, so I recommend showing up early to get a table in their beautiful dining area!
   Located: 108 N Main Street, Mount Vernon, OH 43050
   Hours: Tuesday-Saturday, 7:30 AM-2:00 PM
3. Best Breakfast Overall: Stein Brewing Company. Have you ever dreamt of a meal? I dream about Stein's short rib hash often— it's that good. Stein serves brunch on the weekends, and whenever we have friends or family visiting, this is where we take them. The food is high quality, and what is brunch really without a mimosa? Another tip I have here is to get a beermosa. They're not on the menu, but any wheat beer like a Hefeweizen is great with orange juice! Just tell them half beer, half juice, and you'll be set for a hearty and unique brunch.
   Located: 109 S Main Street, Mount Vernon, OH 43050
   Hours: Sunday-Wednesday, 11:00 AM-8:00 PM, Thursday-Friday, 11:00 AM-9:00 PM

Did I miss your favorite breakfast in Mount Vernon? I would love to hear from you! There are always new residents and visitors who are looking for the best spots, so comment your suggestions below!

Until next time,
Cassie Johnson
Key Realty - John Yoder Team.

What to do if Your Appraisal is Short!

We have seen this happen more often than we'd like: Buyers are competing for a listing, and the contract price escalated only for the appraisal to come in low half way through the process. This can be a complex and stressful event for both buyers and sellers, and we have tips that can save the deal!

1. Home appreciation rates are vastly different from month to month. Last week, we showed the data from S&P's CoreLogic Case-Schiller Indices for May, June, and June. Consecutively, rates have been record-breaking each month from 14.8% in May, to 16.4 in June, and potentially 17.2% in July. Because of this, data that is even a month old can be out of date.
2. More and more homes are being sold off market. This means that there is additional data that would be considered relevant sales comparison data that likely gets missed because it's not listing in the Multiple Listing Service, where appraisers access information. So it's difficult to get the full picture in neighborhoods where homes are being sold by owner.

So what can be done if an appraisal comes in short? Well, there is an appeal process, during which your agent can find comparable sales data that the appraiser did not have while writing the initial report. It's fairly easy to find sales prices and residential data for homes that transferred off market from your county auditor's website. The key to this process is to find new and helpful data that justifies a higher valuation for the subject property.

If the appeal process fails (or fails to close the full gap between the appraisal value and the purchase price), there are three options: price renegotiation, gap coverage by the buyer in cash at closing, or contract termination.

Sounds like added stress during an already stressful situation, right? For sure. That's why we really recommend finding strong data and comparable sales (including off market sales!) prior to listing. It's critical that the data inform the asking price of a property. Further, if you have all of those comps prior to listing, you can leave them on the counter for the appraiser to review at the time of their inspection. Some appraisers will reference those, and some won't, but it's worth a shot!

If you're a buyer who is considering making an offer on a hot listing, we recommend considering appraisal gap coverage in your offer. Just be sure to only offer what you're willing to pay over appraisal, and be aware that it might not be enough once the appraisal comes back (in other words, you might have to bring additional cash to close the deal).

We hope you found this information helpful! It's crucial to the buying and selling experience that you hire an agent who is savvy and informed. To discuss your real estate goals with us, fill out a contact form at johnyoderteam.com/contact today!

Until next time,
Cassie Johnson
Key Realty - John Yoder Team