06-10-1985 Council Packet - Laserfiche WebLink

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Mayor Mary C. Butler and et. al. June 5, 1985 Page Five have had to have pa..i to secure a new mortgage at tiat time nor the higher closing costs which would have been incurred as the result of a purchase by means of a new mortgage. When these factors are totalled together, the economic advantage to us in being able to assume the existing mortgage was, in our opinion, in excess of $36,000.00. f.) While realtor's provide a valuable service and cost sales of real property have realtors involved, we are aware that when a transaction does not involve realtors the seller usually reduces the price by some percentage of the amount which would otherwise be paid in a selling commission. The real estate commis- sion in this transaction amounted to $11,550.00. In our opinion, the amount of the real estate commission should not be included in setting the "fair market value" of a property, even though it may be a necessary component in the vast majority of sales prices of real estate transactions. It is evident that when one subtracts the economic valve ^f all of the above -factors, the actual price which we paid is below our present opinion of the "fair market value" of $128,000.00. However, in arriving at our opinion we attempted to fairly asses the true market value not the lowest possible figure we could p- sent to you, even though we have a factual b,-,sis for a lower amp _-.t. Our challenge to the proposed "estimated market value" does not end, however, with a determination, or what the "fair mar- ket value" of our home is. There is the significant issue of equality of taxation. The Minnesota Constitution, the Minnesota statutes and the Minnesota court decisions require that all prop- erties be taxed equally. If all properties had an "estimated mar- ket value" equal to their "fair market valve:", the equality issues would not exist. However, this is not the case. The sales rat_t• studies, which have been prepared by the office of the Minnesota Commissioner Of Taxation, reveal th_it "estimated market value" is below the actual cash sale value. The Minnesota Tax Court and the Minnesota Supreme Court have consistently required that the "esti- mated market value" of a property, which is used for real estate tax purposes, he reduced from t:I,e "fair market value" of the prop- erty by the applicable sales ratio studies. "he most recently available sales ratio studies for Hennepin County weighted for type and percentages of property in each tax classification gives rise to an applicable percentage to be applied of 86.611. There- fore, according to law, the "estimated market value" of our property should be set at $111, 116.80, which could be rounded to $111, 100.00 or $111,200.00.