3rd question

[bluesky]

I thank you all for the help. If I have a house with a tax value of 130K and my first mortgage has 95K remaining on it and 2nd mortgage has 25K remaining on it, does this mean my equity is 10K?? I'm confused by the exemptions and how mortgages play into a ch. 7 if you keep the house. Do the creditors get some of this?

[NoMoreCards]

It was my understanding that the tax value was typically about half of the sale value of your home. (In Michigan) So having a tax value of 110K means the house would probably sell for 220K. If this is true in your state, your equity would be higher.

Example, my first mortgage is 170K, my second is 12K which makes 182K owed on the house. My house has a tax value of 110K, so a rough sale value of 220.
So my equity is 38K.

Make sense? Nah, it don't to me either but that is how it is done in the state of Michigan with the tax value. :-)

I wish you the best.

[bluesky]

wow!

I had no idea NoMoreCards, I know my house is not worth twice the tax value. I'm surprised the tax collector would lose money by only giving half the sale value to a home, thus reducing the tax money coming into their greedy pockets. But if that is the case and my equity is a lot more than 10k will that mean a ch. 7 is less desirable than a 13 if i want to keep house?

[NoMoreCards]

I don't understand why they do it that way in Michigan, but they do.
The Michigan Constitution still requires all properties to be assessed annually at 50% of market value.

You may have more equity in your home than you thought. Discuss the options with a attorney to see which chapter would better suit your needs. But I think having a large equity in your home makes a chapter 7 less appealing.

I do not know the laws of other states, so if you are not in Michigan this may not be true for your state.

[NoMoreCards]

I just noticed in another thread you mentioned NC.
Assuming North Carolina...

http://www.co.gaston.nc.us/TaxDept/AssessmentDuties.htm

The Valuation Standard:

In North Carolina, the appraisal standard for all property is "True Market Value". With few exceptions, tax assessments are the same as the appraised values. Properties with preferential treatment and certain exclusions are often assessed (taxed) at a value below their appraised value. Properties that are fully exempt have a zero assessment.

So the Michigan tax value does not apply.

[bluesky]

Nc

correct, NC. quite a bit different than your MI rules huh? so I'd estimate my equity in the 10-20k range most likely.

[Tbornetun]

You won't estimate the equity, you will use exact numbers. Tax value minus ACTUAL principal balance on 1st and 2nd.

[StartingOver08]

True Market Value for TAX purposes is NOT the same as the actual market value if you sold your home.

The best measure is an appraisal, or if you do not have the funds for an appraisal, get a CMA from a Realtor (free). The CMA should use comparable sales within the last 90 days to determine the actual value of your home. This CMA needs to be in writing from a professional experienced Realtor.

Remember, the tax valuations (with the apparent execption of MI) are usually much higher than the actual market value in a market like the one we are currently experiencing. Don't short change yourself. Take the time to get a CMA if the equity is at stake.

[Chowder]

My Trustee accepted Zillow and assessed value. It's values are very close in our area.

In many areas -including mine- assessed values are often over current market values.

So much of this stuff is area/district/trustee specific. Typically, if you are comparatively little over exempted values, your are fine. It's just not worth the hassle to force you from a home you intend to keep for a possible 10k.

[whipster1]

Here in TX they use the TAX value since everything is tanking yet the Tax value keeps going up...not sure how that works.

[hereforinfo]

I just noticed in another thread you mentioned NC.
Assuming North Carolina...

http://www.co.gaston.nc.us/TaxDept/AssessmentDuties.htm

The Valuation Standard:

In North Carolina, the appraisal standard for all property is "True Market Value". With few exceptions, tax assessments are the same as the appraised values. Properties with preferential treatment and certain exclusions are often assessed (taxed) at a value below their appraised value. Properties that are fully exempt have a zero assessment.

So the Michigan tax value does not apply.

I don't think that means what you think. It is basically saying that the assessed amount equals the tax appraisal other than in few exceptions. It doesn't mean that the tax appraisal is the actual fair market value, or the same as you could realistically expect to sell the home for. There's no way the county appraiser would be able to accurately determine real fair market value because there are too many variables their formula does not have access to.

In most cases, the tax appraised value is not the same as the real value of the home and there could be any number of reasons for this. In my county, the tax appraiser uses a formula based on average sales of all homes in a specific area over the past 3 years. A true market appraisal uses only the 3 most recent comparable sales, preferably ones that are similar in size and features, very close to the subject property, and within the past 6 months or less. You can see how the two values would differ.