Between the market value of a home and the actual selling price may be a difference. Both rising and falling housing can greatly affect the income on housing. Did we get it right then take the prizes, but that can also fall. What impact can the difference between the market value and selling price on the situation of the citizens?
Fluctuation of the housing market and the economy
Rising house prices
Influence with property tax objection
Is it well with an economy than do people and businesses money to invest. Consumer satisfaction is high, so one does a quick purchase. Similarly, for the purchase of a home. Gains can be achieved quickly in this situation. The probability of a housing market hype and the inevitable splashing them are real. After good times always follow bad times, with the economy turns bad. People have less money to spend or keep the money in their pockets. Consumer spending and postponed home purchases are not made. In addition, they would prefer not to sell, because the accumulated value as snow in the sun can disappear. Within this fluctuation of the housing market - which is linked to the economic cycle - occur regularly gaps between the market value and selling price. What are the consequences?
Going well economically than house prices over the years will gradually rise, which one can make a profit from the purchase of a property. Investing in Commercial and Residential brings probable certainty, which can be realized a handsome profit on a sale. The selling price is above the value of the outstanding mortgage debt, and that means that sales people can make a profit. Lost only one additional increase during the term than the profit can. It will be also interesting to stabbing the profits from one house sales in the purchase of another home. Gradually growing equity.
If the housing market is overheated with unrealistically high prices then it is inevitable that there are bad times arrive housing. The balloon can then, as it were burst. Value-building is slow, but a loss in value is usually pretty quick. A crisis can also have a major impact on the entire housing market, so the citizen as well as banks and possibly a country can get into financial trouble. If there is a correction to the unrealistic market value can house prices fall significantly a few years. In addition are three main reasons why houses are sold poorly:
The citizen does not have money anymore. It is careful to buy a home during bad times;
the seller would rather not sell because they must take a debt on the sale. Although that debt will grow over time only by a declining housing market;
the bank is not cooperating with the purchase, because the value of the collateral declines in value only.
This unfavorable situation can only resume well as the economy pick up again and the housing market goes through the valley. Only then will increase confidence and they will buy more homes again. In the meantime, the value of the home decreased significantly and could provide a major residual debt when sold. Mortgage debt puts ie far above the sales price.
During the term of a mortgage may be circumstances occur, so one is forced to sell the house. Chances thereby that the real value of the sale price is below the mortgage debt. This is certainly the case in a declining housing market, if one relatively recently purchased a house. Even if you cover them loosely per year on your mortgage, you have the annuity in ten years, approximately twenty percent paid off. Home price decreases can add up to eight percent per year and takes the part paid off pretty quickly. Forced sale therefore offers great concern for many citizens, because one is left with a substantial residual debt. If no one has taken out mortgages under the National Mortgage Guarantee the consequences for the vendors are great.
Remains one neatly owner of home ownership for all the fluctuations that they also have to deal with. The gap between the actual value and the value established by the real estate community is incorrect. The municipal authority will namely use value figures of a year ago, making some things by definition is outdated. And can give rise to the following conditions. In both cases it may be advisable to file a complaint in order to save on expenses.
The housing market rises
The value determination of the municipality is one year behind, so you pay less tax in principle than necessary. Yet it may be that the value of the home compared with homes that are too expensive. Ie the property can still be graded too high. One receives the value available to the community, ask for a copy of the appraisal report to assess whether it is realistic.
House prices fall
If the development of the retail price several years been a bad image shows the data of the municipality run well behind. It certainly pays too much taxes. The WOZ value is too high and scaled as one pays the bill. If the difference is too large may mean that they have to repay part of the provisional refund to the tax authorities. So watch for a falling market.