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N Cal Attorney
N Cal Attorney, Lawyer
Category: Real Estate Law
Satisfied Customers: 9334
Experience:  Since 1983
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What is the fair market value of a house if the owner cannot

Customer Question

What is the fair market value of a house if the owner cannot transfer the ownership to another party?
Submitted: 9 months ago.
Category: Real Estate Law
Customer: replied 9 months ago.
The seller was an owner builder who attested under penalty of perjury that the house would not be for sale for one year after completion of renovations
Customer: replied 9 months ago.
Isn't the fmv zero?
Expert:  N Cal Attorney replied 9 months ago.

Thank you for your question.

The fair market value is defined as what a willing buyer would pay a willing seller. It is usually determined by having one or more appraisers appraise the property. Appraisals are based on a lot of factors including the age and condition of the property, proximity to fire stations and schools and prices recently paid in the area for comparable properties.

The fact that the owner builder is not allowed to sell for a year does not affect the market value of the property. The owner still has to pay property taxes on the assessed value of the property even if it is temporarily unmarketable.

Properties with lis pendens recorded against them are not marketable, but appraisers and insurers assign them a fair market value all the time.

I hope this information is helpful.

Customer: replied 9 months ago.
Sorry I don't agree. Please see the analogy case belowThe antique trade is in an uproar about what’s being called “the ivory mess,” and new regulations by the Fish and Wildlife Service (FWS)1 may affect the valuation of many estates. At issue are small amounts of ivory in pianos, antique furniture, violin bows, jewelry, knives, clocks, canes, sculpture, silver teapots, pens, guns and even billiard cues. New rules and enforcement guidelines may render these items not only illegal to export or import, but also unsalable within the United States.Heirs will be surprised to discover that auctioneers may now be unwilling to accept these antiques for sale, and because of lack of marketability, appraisers are likely to value them at zero. The dilemma for tax preparers is that, as demonstrated by the recent Sonnabend2 case, the Internal Revenue Service may challenge a zero valuation even when an object can’t legally be sold.Bot***** *****ne fmv is zero since definition is what a buyer and seller agree on. In the case the seller cannot legally sell the house there can be no
Fmv. It is true the county and insurance companies put a value on the home but those values are not the fmv. Thanks
Expert:  N Cal Attorney replied 9 months ago.

The owner built house is not illegal the way vory may be. The owner can still contract to sell it and agree that title cannot be transferred until after the year expires. That is my honest opinion, I am not here to just tell people what they want to hear and I do not see the ivory situation as relevant. If you are not satisfied with my answer, you can opt me out and request a different expert who might have a different perspective.

Customer: replied 9 months ago.
Thanks
Expert:  N Cal Attorney replied 9 months ago.

Do you want me to opt out?

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