According to Warren Bland, PhD, an award-winning author and geographer at Cal State, people have a great option. It’s called “equity-take” that is, the difference in cost of comparable housing between your present community and the more affordable one to which you could move. So, if you are willing to make that move, you can pocket a good chunk of money instead of delaying your retirement.

Consider the person hailing from Buffalo, NY, where the average upper middle class home sells for around $250,000. In Thomasville, Georgia, one of the most desirable retirement places in the Atlantic Southeast, many attractive single-family residences in beautiful neighborhoods are selling for around $140,000. This means that you could net about $100,000 (assuming your mortgage is paid off) by relocating from snowy Buffalo to sunny southern Georgia, and increase your annual net income by $5,000 by investing in, for example, tax-free municipal bonds at 5 % annual interest.

People living in expensive metropolitan areas like New York, Los Angeles, the San Francisco Bay Area, Boston, Chicago and Toronto are in an even better position to use “equity take” to their advantage. The average price of upper middle class housing exceeds $1million in Manhattan, $700,000 in Los Angeles and the SF Bay Area, and is around $500,000 in Boston and Toronto. In contrast, home prices in many highly desirable cities and towns, suitable for retirement and located in all parts of the country, are more likely to be in the $150,000 to $300,000 range. Even a relocation from Manhattan to Boca Raton, Florida (one of Bland’s “top ten” retirement picks), could leave you with an equity-take of $500,000. Investing that windfall in tax-free municipal bonds at 5 % annual interest, will increase your annual income by $25,000. As Bland says, “You can buy a lot of wine, gourmet food and entertainment with that kind of money”!

Barbara Kimmel is an award-winning book publisher, publishing consultant and publicist. She is the publisher of Warren Bland’s book, Retire in Style 60 Outstanding Places Across the USA and Canada. Books are available through all major bookstores, amazon.com or http://www.nextdecade.com

If You Cant Afford to Retire…Move

If you are in the home buying or selling market, it’s important to understand the difference between tax assessment and appraisal value. Concentrate on the appraisal value because this determines your asking price.

Understanding Tax Assessment

The tax assessment is a tool local governments use to exact a property tax rate on residents. The local government determines your home’s worth by reassessing the homes in the area you live in periodically. Some areas reassess every 2-3 years. But with today’s booming real estate market, the National Association of Realtors estimates 60-70% of U.S. tax assessments do not reflect the escalating market value on home sales. This is why the tax assessment is not always an accurate gauge of true home worth.

Tax assessment offers a general idea of home value. If you are curious about whether your tax assessment office is keeping up with the local market, telephone your local real estate board and local tax assessment office. Ask them about the local appreciation value on homes to determine if they are up-to-date.

Focus on the Appraisal Value

Home sellers should concentrate on the appraisal value, because a mortgage lender will write a loan on the home for this amount. Location is the prime factor in appraising a property. An appraiser will look at three homes that sold during the previous three-month period to determine what similar properties have sold for in the same neighborhood. If your home is in a rural area, or if the sales in your area have been sluggish, the appraiser can go within a five mile radius to locate similar homes for comparison. If there is home value inflation in the area, the appraiser will factor this in. A good appraiser will contact the realtor who sold the homes he or she is using as a comparison.

What Do Appraisers Look For?

An important rule of thumb of real estate is: location, location, location. Appraisers are mainly focused on the following to determine home worth:

• square footage

• condition and age of the home

• location

• lot size

• number of bedrooms

• number of bathrooms

• total number of rooms

• garage(s)

• decks

• screened porches

• fireplaces

Secondary Enhancements Help a Home Sell

There are other bells and whistles the appraisers may factor in, but their impact on home value is marginal. Although these improvements do help the home sell, they do not impact the appraisal significantly.

Here are some examples:

• ceramic tile

• hardwood floors

• crown molding

• chair railing

• specialty counter tops, cabinetry

• sprinkler system

• wainscoting

• upgrades in light fixtures

• upgrades in faucets, sinks, tubs and showers

• swimming pool

Sell Your Home Quickly

Do not be mistaken — upgrades are worthwhile because they will help sell your home quickly. For example, eye-catching landscaping will lure people in to look at the home, because 80% of homebuyers decide if they like a house when they first drive up to the property.

When do I Need an Appraisal?

Home sellers may want to pay for a professional appraisal so they know the true value of their home, but they are not required to have an appraisal. Your realtor will determine an asking price with you. To determine a fair and marketable price for your home, expect your realtor to research comparable home sales on Multiple Listing Services (MLS). Homebuyers are required by the lender to have an appraisal done and they must pay an average of $300-500 for it. Payment is due at the time of the appraisal. The buyer does not have the right to choose the appraiser — the lender does this. Loan officers keep an approved list of appraisers on hand.

Research on Home Value

While conducting research on home value consider this: Is the neighborhood you live in completely built out, or are you competing with new homes still being built? If you are putting your home on the market and would like to conduct some of your own research, you can do one of three things. Visit the courthouse in your county and see what has sold in your area that is similar to your home. Call your local realtor and ask for a comparative market analysis. Or, visit open houses in your neighborhood which are similar to your own, to see what they are selling for. All of these activities are a good education for homeowners interested in learning the value of their home before placing it on the market or refinancing.

About The Author

Elaine VonCannon is a REALTOR with RE/Max Capital in Williamsburg, Virginia, and she manages investment property as part of her business. Elaine is also an Accredited Buyer’s Representative as well as a Senior Real Estate Specialist. She has helped numerous clients invest in and make money on property in Southeastern Virginia. Visit http://www.voncannonrealestate.com” target=”_new.

vonmor1 @ cox .net

Tax Assessment/Appraisal: How Do I Know What My Home is Worth?