Assessed Value vs. Market Value: What’s the Difference?

By Lisa Gordon | Apr 4, 2017

Homes don’t come with sticker prices set in stone. Rather they are moving targets—that’s what makes buying and selling real estate so fun! (Or frustrating, depending on your perspective.) And, as a buyer or seller, you will likely hear two “prices” thrown about: assessed value versus market value. So what’s the difference?

While assessed value and market value may seem similar, these numbers can be different—typically assessed value is lower—and they’re used in distinct ways as well. So let’s clear up any confusion so you can wield these terms to your advantage.
What is market value?

Casey Fleming, a former real estate appraiser and author of “The Loan Guide: How to Get the Best Possible Mortgage,” says the technical definition of market value is “the most probable price that a given property will bring in an open market transaction.” Or, in plain English, “It’s the price that a buyer is willing to pay for a home, and that a seller is willing to accept.”

Real estate agents are trained to pinpoint a home’s market value, which is done by looking at a variety of characteristics, including the following:
• External characteristics: Curb appeal, exterior condition of the home, lot size, home style, availability of public utilities.
• Internal characteristics: Size and number of rooms, construction and appliance quality and condition, heating systems, and energy efficiency.
• Comps, or comparables: What similar homes in the same area have sold for recently.
• Supply and demand: The number of buyers and the number of sellers in your area.
• Location: How desirable is the neighborhood? Are the schools good? Is the crime rate low?

A home’s market value often is a good starting point for all kinds of things. For one, listing agents use market value to help sellers come up with a fair asking price for their home. And, since buyers shouldn’t just trust what sellers say their place is worth, their own agent can also estimate the home’s market value and come up with a different price that they think their clients should offer. No number is right or wrong; the ultimate deciding force is what price a buyer and seller are willing to shake hands on to close the deal.

What is assessed value?
When trying to understand the assessed valued of a property, you must know who is doing the assessing and why the property is being assessed.

Municipalities, mostly counties, employ an assessor to place a value on a home in order to levy property taxes on it. To arrive at a value, the assessor (similar to a real estate agent) looks at what similar properties are selling for, the value of any recent improvements, any income you may be making from, say, renting out a room in the property, and other factors—like the replacement cost of the property if, God forbid, it burns down in a fire (which sounds dark, but assessors are thorough professionals who consider every possibility).

In the end, the assessor comes up with a value of your home. Then, he multiplies that number by an “assessment rate,” a uniform percentage that each tax jurisdiction sets that is typically 80% to 90%. So if, say, the market value of your home is $200,000 and your local assessment rate is 80%, then the assessed value of your home is $160,000.

That $160,000 is then used by your local government to calculate your property taxes. The higher your home’s assessed value, the more you’ll pay in taxes. You can check with your local tax assessor for a more exact figure for your home, or search by state, county, and ZIP code on

What assessed and market values mean to you
While a home’s market value can rise and fall precipitously based on local conditions, assessed values are typically more immune to fluctuations. Some states, like Oregon, prohibit the assessed value from rising more than 3% a year, “even if the market value goes up more,” says Nathan Miller, founder of Rentec Direct, a software company that educates property manager and landlords.
But the bottom line is, don’t get be
nt out of shape if you hear your assessed value isn’t as high as you’d hoped. Assessed value is used mostly for property tax purposes. Home buyers and sellers, on the other hand, look more to market value instead.

However, assessed value can come up when you buy or sell a home because this number, unlike the loosey-goosey market value, is public knowledge contained in property records. So, rising assessed values bode well when home sellers try to justify their sales price to a buyer: “Hey, the assessed value is $310,000, and I’m only asking $320,000.” Likewise, buyers can use assessed value to justify a lower price: “Hey, the assessed value is $260,000, and you’re asking for $300,000. What gives?”
But the thing to remember with both assessed and market value is that at the end of the day, the price of a home is all in the eye of the beholder. The only number that matters is what a buyer and seller can agree sounds right, so don’t take any number you see too seriously.

What Is a HERS Index? Putting a Number on Energy Efficiency

By Cathie Ericson | Apr 13, 2017

We’re all looking for ways to be more efficient—at work, with our money, with our time. We measure how fuel-efficient a car is by calculating the miles per gallon. To measure the energy efficiency of a house, builders and homeowners use a scale called a HERS Index. So what exactly is the HERS Index, and how does it affect your home?

The Home Energy Rating System (HERS) Index was developed by the Residential Energy Services Network, or RESNET, to gauge how energy-efficient a new home is. The HERS Index applies specifically to new construction or down-to-the-foundation renovations of an existing home. To determine how energy-efficient your existing home is, you’ll want to get an energy audit.

The HERS Index

A standard new home earns a HERS Index score of 100. Most house scores fall between 0 to 150. The lower the number, the more energy-efficient the home.

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According to the National Renewable Energy Laboratory, a home with a score of 20 could save you close to $2,000 on your annual energy bills. (Check out the comparisons here.)

The HERS Index measures the energy efficiency of a house.
The HERS Index measures the energy efficiency of a house.Florida Solar Energy Center
What happens during a HERS Index assessment?

Find homes for sale on
The assessments are performed by a certified HERS Rater who visits the home to perform a comprehensive analysis of how well (or poorly) it conserves heat and uses energy. As part of the assessment, the rater will make recommendations on which upgrades should be considered and their relative benefits.

“The energy efficiency of a home can be improved by reducing the air leakage, adding insulation, or upgrading the heating and/or air-conditioning system,” says Jay Best, owner of Green Audit USA in Islandia, NY.

The comprehensive assessment, which typically costs between $1,500 and $3,000, includes:

A duct leakage tester
Thermographic imaging that pinpoints exactly where energy is escaping
A “blower door test,” which uses a fan to test the air infiltration rate of the home and reveal leaks
According to RESNET, a HERS Rater will assess the following:

The amount and location of air leaks in the building envelope
The amount of leakage from HVAC distribution ducts
The effectiveness of insulation inside walls and ceilings
The home’s orientation (with north/south exposure being more efficient)
The number and kind of windows (double-pane is a plus)
Presence of solar panels or other energy generation methods
Why a HERS Index score is important

Builders use the HERS Index score to specify the minimum efficiency of new home construction before a Certificate of Occupancy is issued.

“Not only does the home design have to meet certain criteria, but the HERS Rater has to test the house and perform and document inspections,” Best explains. These inspections during the construction process ensure the house is built as designed and the insulation is installed correctly.

A home with a lower HERS Index score will save energy and money. While some home listings may include HERS information for new constructions, it hasn’t been standardized nationwide. You can also check the HERS Index database to see if your home has been rated in the past.

“Savvy consumers and people shopping for a new home should inquire about the HERS score—an efficient house is more comfortable, healthier, and costs less to operate,” Best says.

What Is a Listing Agent? Why a Home Sale Hinges on Agent’s Expertise

What Is a Listing Agent? Why a Home Sale Hinges on Agent’s Expertise
By Liz Alterman | Sep 14, 2016

Hero Images/Getty Images
If you’re getting ready to sell your home, finding a listing agent should be at the top of your to-do list. But just what is a listing agent? You might have a vague mental image of someone who plants a “For Sale” sign on your front lawn and shows potential buyers around your place, but there’s plenty more to it.
Here’s a primer on what a listing agent does, how the agent makes or breaks your sale, and how to find the right agent for you.
How listing agents help you price your home
How much is your home worth? That’s a hard question to answer. You can get an estimated value by entering your address on®, but from there you’ll want to do some fine-tuning—and that’s where a good listing agent can help.

And the stakes are high: Price your home too low, and you could lose out on a lot of money. Price it too high, however, and the picture isn’t pretty either. While it may be tempting to work with an agent who says he can fetch a fortune for your home, overpricing may mean your home languishes on the market for months or even years—making buyers wonder if something’s wrong with your home and lowball you anyway.
“Listing agents have many duties and responsibilities, but at the top of the list is to properly price your home,” says Janine Acquafredda, a Realtor® with House-n-Key Realty.
To do this, a listing agent will analyze the sales prices of comparable homes, or “comps,” in your area to see where yours should fit in, and advise you accordingly.
How listing agents help you sell your home
After you determine an asking price, a listing agent should provide you with a comprehensive marketing plan detailing how she’ll get your property sold. This plan should include the following:
• Recommendations for home improvements or home staging, if necessary. Yes, these alterations will cost you time and money, but they will improve your chances of a faster sale and higher asking price.
• Taking photos or hiring a photographer who will be able to highlight your home’s best features.
• Adding your home to the multiple listing service, where home buyers and their agents can view your property and decide if they’d like to come visit for a closer look.
• Advertising and holding open houses.
• Coordinating showings with prospective buyers.
How listings agents negotiate with buyers
Once you get an offer on your home, it’s the listing agent’s job to present it to you and advise if any haggling needs to be done. For instance, if you get an offer way below asking price, your knee-jerk reaction may be to refuse in a huff. But a listing agent might be able to negotiate with the buyers and bring that price up to a decent level—or, if the buyers truly can’t budge much, find other ways to sweeten the deal like a faster closing date or waived contingencies. These compromises can actually save you tens of thousands of dollars.
How to choose a listing agent
If you’re looking for a listing agent, you can find ones in your area at, where you’ll find such details as their years of experience, number of homes sold, clients’ reviews, and more. Don’t just move forward with the first agent you meet. Choose at least a few and ask them some questions to assess whether they’re right for you.
Here are some questions to ask a prospective listing agent:

• How many homes have you sold in this area, and how long did it take?
• In what price range do you sell most of your homes?
• Do you have advice for me about the condition of my home, and what could be improved to glean a higher sales price?

• What is your marketing plan?
• Can you recommend contractors, photographers, moving companies, etc.?
• Are you a member of the National Association of Realtors®? (Realtors must abide by the group’s code of ethics.)

• Is this your full-time job? (A part-time agent is not a problem, but you will want to gauge her availability during off-hours.)

• How often will you touch base with me?
• Are you planning any vacations, and if so, who will back you up?
How much listing agents get paid
Listing agents don’t receive a dime unless your home gets sold. If it does, the typical agent commission is 6% of the price of your home (which is typically split between the listing agent and the buyer’s agent). This price may seem substantial, but consider this: For every hour an agent spends with you, he will spend an average of nine hours behind the scenes working on your behalf. In other words, listings agents work hard to earn that commission and get your home sold.
Michele Lerner contributed to this report.


Fla. home sales up 9.3% year-to-year in March

Fla. home sales up 9.3% year-to-year in March

NAR: U.S. home sales jump 4.4%, hit 10-year high

ORLANDO, Fla. – April 21, 2017 – Florida’s housing market reported more closed sales, higher median prices and increased pending sales in March, according to the latest housing data released by Florida Realtors. Sales of single-family homes statewide totaled 25,921 last month, up 9.3 percent compared to March 2016.

“March’s strong sales likely were influenced by buyers ready to take action before interest rates could move higher,” says 2017 Florida Realtors President Maria Wells, broker-owner with Lifestyle Realty Group in Stuart. “Higher demand, coupled with a shortage of available homes for sale, continues to put pressure on prices – so buyers are eager to make an offer when they find the right property.

“That means it’s a good time for sellers to list their homes since they continue to receive a higher sales price as inventory remains scarce,” Wells adds. “In March, sellers of existing single-family homes received 96.1 percent (median percentage) of their original listing price, while those selling townhouse-condo properties received 94.7 percent – an indication that the listed price is extremely close to market value.

“Consumers who work closely with a local Realtor have an expert guide to help them navigate the often-complex process of buying or selling a home.”

The statewide median sales price for single-family existing homes last month was $231,900, up 10.4 percent from the previous year, according to data from Florida Realtors research department in partnership with local Realtor boards/associations. The statewide median price for townhouse-condo properties in March was $171,000, up 9.4 percent over the year-ago figure.

March marked the 64th consecutive month that statewide median prices for both sectors rose year-over-year. The median is the midpoint; half the homes sold for more, half for less.

According to the National Association of Realtors (NAR), the national median sales price for existing single-family homes in February 2017 was $229,900, up 7.6 percent from the previous year; the national median existing condo price was $216,100. In California, the statewide median sales price for single-family existing homes in February was $478,790; in Massachusetts, it was $330,000; in Maryland, it was $251,816; and in New York, it was $242,000.

Looking at Florida’s townhouse-condo market, statewide closed sales totaled 11,193 last month, up 11.4 percent compared to March 2016.

Closed sales data reflected fewer short sales and cash-only sales last month: Short sales for townhouse-condo properties declined 29.7 percent while short sales for single-family homes also dropped 33 percent. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

“March turned out to be one of the strongest months we’ve seen in a long time for sales of existing homes in the Sunshine State,” said Florida Realtors Chief Economist Dr. Brad O’Connor. “Sales for both single-family homes and for townhouse-condo units in March marked the fourth-highest monthly total for any single month over the past decade.

“The data shows that inventory levels in the more affordable price tiers continue to fall, especially in the case of single-family homes. The number of active single-family home listings was down almost 5 percent year-over-year at the end of March. As a result, the single-family sector remained a seller’s market, though the inventory situation in the townhouse-condo market appears more balanced.”

In a continuing trend, inventory remained at a tight 4.1-months’ supply in March for single-family homes and at a 6.3-months’ supply for townhouse-condo properties.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.20 percent in March 2017, up significantly from the 3.69 percent average recorded during the same month a year earlier.

To see the full statewide housing activity reports, go to Florida Realtors Media Center and look under Latest Releases, or download the March 2017 data report PDFs under Market Data.

© 2017 Florida Realtors

Borrowers lost homes to Ocwen, lawsuits say

WEST PALM BEACH, Fla. – April 21, 2017 – The survival of one of the nation’s largest non-bank mortgage servicing companies was thrown into question Thursday as the company was hit with federal and state lawsuits for allegedly failing borrowers with mistakes, shortcuts and other problems that cost some people their homes.

Ocwen Financial Corporation allegedly botched basic functions such as sending accurate monthly mortgage statements, properly crediting borrowers’ payments and handling taxes and insurance, according to a lawsuit filed in a Florida federal court by the Consumer Financial Protection Bureau.

The CFPB also accused the company, based in West Palm Beach of improperly foreclosing on struggling borrowers, ignoring complaints and selling servicing rights to mortgage loans without fully disclosing mistakes the company and its subsidiaries made in borrowers’ records.

In all, Ocwen improperly started foreclosure proceedings on at least 1,000 people and has “wrongfully held foreclosure sales,” the CFPB charged. The firm’s alleged failures also led to lapsed homeowners’ insurance coverage for more than 10,000 borrowers, the regulator said.

The Florida Attorney General’s office filed a similar state action. And mortgage regulators representing more than 20 states issued separate orders that bar an Ocwen subsidiary from acquiring new mortgage servicing rights and originating additional home loans until the division shows it can properly manage escrow accounts. Those actions could jeopardize the company’s financial operations. Shares of Ocwen Financial nosedived Thursday, closing nearly 54 percent lower at $2.49.

“Ocwen has repeatedly made mistakes and taken shortcuts at every stage of the mortgage servicing process, costing some consumers money and others their homes,” CFPB Director Richard Cordray said in a statement issued with the federal action.

The company characterized the CFPB allegations as “inaccurate and unfounded.”

However, Florida Attorney General Pam Bondi and the state’s financial regulatory agency separately accused Ocwen of filing illegal foreclosures, failing to pay insurance premiums from escrow accounts and collecting excessive fees. The company failed to make good on pledges to improve its mortgage-servicing performance since agreeing to a multistate settlement in 2014, said Bondi, who added, “enough is enough.”

The order issued by North Carolina banking commissioner Ray Grace said mortgage regulators in multiple states identified problems with Ocwen’s handling of escrow accounts and other violations of federal and state laws in 2015. Based on the findings, Ocwen approved an agreement that required the company to fund an independent audit of the accounts by Jan. 13, 2017.

Instead, the company responded in January that reconciliation of the accounts in question “would cost $1.5 billion and be well beyond Ocwen’s financial capacity to fund,” according to the North Carolina order. “We cannot allow this to continue,” Grace said in a formal statement.

Ocwen said it would respond to the state mortgage regulators after reviewing their orders.

Founded in 1988, Ocwen has more than 9,000 employees and services mortgage loans in all 50 states and the District of Columbia. The company has specialized in subprime home loans over the years. As of Dec. 31, Ocwen serviced nearly 1.4 million loans with an aggregate unpaid principal balance of $209 billion, the CFPB said.

Mortgage servicers process paperwork and repayments, deal with loan modification requests and perform other tasks involving borrowers – who have no say in selecting the servicing companies and typically cannot switch to other firms.

The frustrating and expensive experience of one consumer illustrates the problems some borrowers faced with Ocwen. Shaun Mee says he almost faced foreclosure last year in trying to win a mortgage modification approval from the company.

Trying to lower his monthly mortgage payments, the Colorado Springs homeowner said in a phone interview Thursday he applied to have his loan modified with a lower interest rate. Mee said Ocwen sent him an approval letter in August 2016. And he began making lower payments based on the new schedule.

Shortly afterward, Ocwen called to say the modification application process had to be started all over again because “something wasn’t entered right,” Mee said.

“We sent in all the paperwork,” said Mee, who works in sales at Clark Roofing. “Then they said we had to do it all over again. And whenever you called them, you never spoke to the same person. I kept calling them over and over. They kept saying ‘the computer went down.'”

Meanwhile, he began receiving non-payment warnings from Ocwen. Because Mee wasn’t making the full payment that was due before the approval of the loan modification, Ocwen reported to credit agencies that he was late in paying. That hurt his credit “bad,” Mee said.

Meanwhile, real estate agents and investors began visiting the house and calling him to inquire about a sale. Mee says he was told by several real estate agents that he was on “a foreclosure list.”

He called his congressional representative and then posted a February alert on Facebook that said, “Warning to anyone thinking or already using Ocwen!!!! Run away as fast as you can!”

A day after he wrote the post, Mee said Ocwen notified him that his modification request had finally won approval, he said. Phone calls from agents and investors have stopped.

“I think it’s strong-arm tactics they use,” Mee said.

Ocwen did not immediately respond to an email seeking comment on Mee’s statements.

The federal lawsuit asks the federal court to order Ocwen to comply with mortgage servicing laws, provide compensation to borrowers who were harmed by the company’s actions and pay unspecified penalties.

A USA TODAY review found Ocwen had the third-highest total of mortgage-related complaints filed with the CFPB between December 2011 and October 2014. Only Bank of America and Wells Fargo had more.

Copyright 2017,, USA TODAY, Kevin McCoy and Roger Yu

More owners opting for a cash-out refi mortgage

RICHMOND, Va. – April 17, 2017 – They’re either a valuable financial tool for homeowners or a harbinger of trouble on the horizon: Cash-out refinancings, which were wildly popular during the housing boom years and contributed to the severity of the crash, are on the rise again.

National mortgage investor Freddie Mac reports that 45 percent of all home loan refinancings in the final three months of last year involved cash-outs. That was the highest percentage since the end of 2008. Black Knight Financial Services, a mortgage technology and analytics firm, says homeowners pulled $31 billion from their equity holdings in the fourth quarter of 2016 – a jump of 50 percent over the same period the year before.

In a cash-out transaction, borrowers come away with a new mortgage that is larger than the one being replaced. The borrowers pocket the difference between the old balance and the new mortgage amount and can spend it on anything they choose. In a simplified example, you could refinance a loan with a $250,000 balance, replace it with a $300,000 mortgage and walk away with $50,000, not counting transaction costs.

Much of the current cash-out surge is the result of steadily rising home prices and equity holdings since 2012. According to the Federal Reserve, American homeowners had more than $13.3 trillion in equity as of the end of last December, a $1.3 trillion jump over the same period in 2015. With more equity, rising numbers of owners have been attracted to the idea of using a cash-out refi to pay for remodeling their homes or consolidating high-interest credit card balances and other debts. Lenders don’t audit what borrowers do with the cash they pull out, so some of the money could well be spent on cars, overseas vacations or ongoing household expenses.

But when cash-out refis begin to soar, is that a positive or negative indicator for the housing market’s health?

Critics such as Connecticut-based real estate analyst Keith Jurow say the trend today is reminiscent of the tail end of the boom years – and a little worrisome. Though banks and other lenders may have more rigorous underwriting standards than they did during 2003-2008, he says, they may be “overconfident” about how long housing price inflation will continue and how much of an equity cushion borrowers should be required to maintain. If too many owners get overleveraged, as millions did during the housing boom, any significant market downturn could spell trouble.

“I consider this to be 2007” – near the end of a multiyear string of housing price increases, Jurow told me in an interview. “The euphoria is similar” – people assume that prices can only keep going up. Yet in the event of a financial market correction, which he sees as a distinct possibility, home price inflation could cease and the 15 percent or 20 percent equity levels that some banks rely on as the minimum required for cash-outs “could disappear quickly,” as they did in 2008 and 2009.

Jurow concedes the situation is not as ominous as it was at the height of the boom, when more than 80 percent of all refinancings were cash-outs, but he sees hints of trouble brewing in a handful of micro markets such as luxury condominiums in New York, Miami and San Francisco, where prices are softening or declining.

Other experts disagree.

Leonard Kiefer, deputy chief economist at Freddie Mac, notes that today’s level of cash extractions is nowhere near what it was for much of the last decade. And, unlike the permissive lending practices during the boom years, today’s cash-out borrowers tend to have solid credit, and their post-refinancing loan-to-value ratios are much lower. Freddie Mac won’t purchase cash-out mortgages with less than 20 percent equity stakes. In its low-down-payment loan programs, cash-out refis are banned.

While cash-out activity “is always something to look at,” Kiefer says, today’s 45 percent rate is simply “getting back to historic norms” after years of post-recession lows. Through most of the 1990s, cash-outs constituted 50 percent or higher of all refinancings and that was not associated with a serious housing downturn. So no reason for alarm bells.

Bottom line for you: If you’ve got significant equity built up in your home and a good purpose for the money, consider a cash-out as an alternative to a floating rate home equity line of credit (HELOC). But play it safe. Keep your equity cushion well above 20 percent. And remember the lessons of the bust.

Kenneth R. Harney heads his own consulting firm in Chevy Chase, Md. Write to him at the Washington Post Writers Group, 1301 K St. NW, Washington, DC 20071, or email

Copyright © 2017, Richmond Times-Dispatch, Richmond, VA; Washington Post Writers Group, Kenneth R. Harney.

That cheap offer for Zillow leads isn’t from Zillow

April 17, 2017 – A new scam is targeting Realtors in Florida and elsewhere. The hook is an email that arrives from Zillow, though the company has nothing to do with it. It seems to target Realtors who don’t use Zillow services and offers them a bargain price for two new leads – only $5.

Realtors who receive the email assume that it’s a marketing tactic, and that the bargain price is Zillow’s way of enticing them to try the service to see if they want to continue.

The email, however, does not come from Zillow, and the $5 introductory offer is a tool to get Realtors to input their credit card number and other information.

According to an article in Inman News, a Realtor in Oviedo, Florida, received one of the Zillow scam emails and responded to it. The message offered “two new premium real-estate leads from ZillowAds” but said “Note: You have to unlock these premium leads in order to see complete contact details.”

Instructions for “unlocking” the ads appeared at the bottom of the email: UNLOCK THESE PREMIUM LEADS FOR $5.00.”

The Realtor said the email ad had Zillow’s logo and appeared real. When she clicked on the bottom bar, it redirected her to a webpage with a URL that includes “” in it, but the actual domain name at the end was “.info” rather than the “.com.” After submitting her credit card info to pay the $5, however, she didn’t receive the leads.

To find the missing leads, the Realtor turned to Zillow’s real website.

“These are scam emails and are not sent by Zillow,” the representative said, according to Inman. “Unfortunately, these emails are being sent directly to your email address, and are not going through any of the Zillow systems, so my team and I cannot block these emails from going to you in the future.”

The agent was advised to change her emails and passwords if she already shared private information, and to report the fraud to her credit card companies because “your credit card information may have been compromised.”

The Zillow representative also said that the company never requires anyone to unlock information.

The National Association of Realtors® says it’s looking into the scam.

Source: Inman News, April 7, 2017