![]() ![]() ![]() This is called the loan-to-value or LTV ratio and typically hovers between 60 and 70% of the market value of the property. Lenders structure loans based on a percentage of the quick-sale value of the subject property. Occasionally, a lender will subordinate to another first lien position loan this loan is known as a mezzanine loan, a second lien or a junior lien. Most lenders fund in the first lien position, meaning that in the event of a default, they are the first creditor to receive remuneration. The appraiser must consider operating expenses, taxes, insurance, maintenance costs, and the return or profit most people would expect on the type of property you own.A hard money loan is a species of real estate loan collateralized against the quick-sale value of the property for which the loan is made. The income approach (usually performed on commercial property) requires a study of how much revenue your property would produce if it were rented as an apartment house, a store, an office building and so on. The appraiser must also determine the value of the land itself – without buildings or any improvements. ![]() If your property is not new, the appraiser must also determine how much the building has lost value over time. The cost approach is based on how much it would cost today to build an almost identical structure on the parcel. Two other methods are used to appraise property – the cost approach and the income approach. All other “non homestead” properties are typically capped at 10% increases in your second year of ownership. You will not lose your exemption because you improve your property. During subsequent years, any improvements will fall under the Constitutional limitation. This limitation does not include any change, addition or improvement to a homestead (excluding normal maintenance or substantially equivalent replacement). The Florida Constitution was amended to limit any annual increase in the assessed value of residential property with a Homestead Exemption to 3 percent or the Consumer Price Index(CPI), whichever is lower. That is why Property Appraisers maintain an accurate data base of real estate information, and this is the sale comparison approach to value. Once this is determined, the Property Appraiser can base the value of a property on sales of comparable properties. An arm’s length transaction also means that the property was exposed to the market for a reasonable amount of time and that the transaction is based upon financing terms that are typical of the market. Each transaction must be studied to make sure that it is an arms-length transaction.Īn arm’s length transaction is a sale involving a willing seller and a willing buyer without any undue pressure or special incentives (such as family relationships). To estimate the value of a property, the Property Appraiser must identify the properties that have sold, their sale prices and the terms and conditions of the each sale. Sales of similar properties are strong indicators of value in the real estate market. Individual property values may be adjusted in light of sales activity or other factors affecting real estate values in your neighborhood. At least once every five years, the Property Appraiser or a staff appraiser will visit and inspect each property. The value of your property is considered each year as of Jan 1st. ![]()
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