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  1. #1
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    Default Can a Government Agency Purchase Real Estate for More Than its Appraised Value

    I am looking for any specific laws stating that a government agency cannot purchase real estate for over the value of the property. I need to know the specific wording, whether it says the "appraised" cost or the "actual value" of the property. I'm asking because our government purchased property for over double the state assessors value of the property. I don't know if this is a federal law or a state law, but I am in Washington state.

    I'm assuming there is no penalty for this, other than shaming the agency in public - which I plan to do - but if there is a penalty, I would very much like to know what it is.
    Thank you for your help.

  2. #2
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    Jun 2013
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    Default Re: Looking for Specific Laws on Government Agencies Purchasing Real Estate

    I don't think you are going to find any law that addresses this. There is no reason to make paying above the appraised value illegal, provided they paid the fair market value. I don't know anything about Washington real estate, but in large portions of this country the Market value for a house is higher than the appraised value. If you believe there were corrupt reasons for the overpayment, there are obviously laws that address that.

  3. #3
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    Default Re: Looking for Specific Laws on Government Agencies Purchasing Real Estate

    OK, let me make a guess here. Your town agreed to purchase a tract of land for what you think is above the market value. Is that correct?

    The answer to your question would depend on many things. Is the land being bought for conversation purposes? Is the land being purchased to prevent some sort of development that the community doesn't want? Is it being purchased for a public park?

    The answer to your question is not as simple as you post without know some of the particulars. But you suspect that there is some sort of collusion in the purchase. Is this some sort of political battle?

    So if you want to give us some specifics, maybe we could advise you.

  4. #4
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    Default Re: Looking for Specific Laws on Government Agencies Purchasing Real Estate

    posting hx will tell you plenty

  5. #5
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    Default Re: Looking for Specific Laws on Government Agencies Purchasing Real Estate

    Quote Quoting mooseheart
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    . I'm asking because our government purchased property for over double the state assessors value of the property.
    The assessor's "value" of the property is for property tax purposes and has NOTHING to do with the market value of the property.

  6. #6
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    Default Re: Looking for Specific Laws on Government Agencies Purchasing Real Estate

    Quote Quoting brownj12
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    I don't think you are going to find any law that addresses this. There is no reason to make paying above the appraised value illegal, provided they paid the fair market value. I don't know anything about Washington real estate, but in large portions of this country the Market value for a house is higher than the appraised value. If you believe there were corrupt reasons for the overpayment, there are obviously laws that address that.
    I have a copy of the appraisal - which the school fought for months before giving to me - but the land they used was property in an alternate town 20 miles away, not our town. I have looked and there are plenty of properties with our town that would have qualified for use in the appraisal that have much smaller values. Of course, I am not a realtor, so I am going on layman's terms of the property descriptions. I don't know about corrupt reasons, I spend most of my time trying to decipher why our officials do what they do because I usually find there there was an ulterior motive.

    Quote Quoting budwad
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    OK, let me make a guess here. Your town agreed to purchase a tract of land for what you think is above the market value. Is that correct?

    The answer to your question would depend on many things. Is the land being bought for conversation purposes? Is the land being purchased to prevent some sort of development that the community doesn't want? Is it being purchased for a public park?

    The answer to your question is not as simple as you post without know some of the particulars. But you suspect that there is some sort of collusion in the purchase. Is this some sort of political battle?

    So if you want to give us some specifics, maybe we could advise you.

    Yes, I believe they worked hard to purchase the land for above the current market value. Yes, I suspect some collusion in the purchase. There could be a political battle, but if it is, it is not openly displayed to the public. I'm not sure how to answer all the questions, but let me give you some background.

    In our tiny little town, the parcel of land they purchased was adjacent to the small airport and a privately owned nine hole golf course. The school said they could potentially use it for expanding their sports field, however, they have owned another larger parcel also adjacent to the school for at least 10 years and have done nothing with it. They had no specific use determined except for a potential future use. No study, no investigation or any discussion ever took place as to the actual use of the property. For 8 consecutive years, the district enrollment has decreased and shows no sign of increasing any time soon. Sitting on the board was a person who works for the county zoning commission - this person resigned shortly after the purchase. Another board director wrote in the local newspaper that they were getting such a good deal on the property that they could potentially sell it and make money on it, but that was stated after the purchase when people became upset about it. From our viewpoint, the purchase was made in a rush decision because from the time they started discussion to the actual purchase was less than a month.

    Quote Quoting cbg
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    posting hx will tell you plenty
    I would really love to know what this means.

    Quote Quoting adjusterjack
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    The assessor's "value" of the property is for property tax purposes and has NOTHING to do with the market value of the property.
    Other than paying for my own appraisal, I don't know another way to find this. Do you have any suggestions?

    I hope that's enough specifics, but if you need more, I will see what I can do to provide them.

    Thank you.

  7. #7
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    Default Re: Looking for Specific Laws on Government Agencies Purchasing Real Estate

    posting hx will tell you plenty means that if responders review your past posts, they will learn more about what your situation/motives/reasoning is/are.

  8. #8
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    Default Re: Can a Government Agency Purchase Real Estate for More Than its Appraised Value

    Quote Quoting mooseheart
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    I am looking for any specific laws stating that a government agency cannot purchase real estate for over the value of the property.
    There is no such law either federal or state. The only thing that restrains the government from overpaying for things is the ire of the voters should the voters decide they don’t want to fund wasteful spending. Overspending for stuff is pretty common, unfortunately. You can find news reports about wasteful government spending every year. It’s not illegal by itself for the government to overpay. It’s certainly stupid and a mark of poor management, but the remedy for that is at the ballot box.

    Of course, as has been mentioned by others, if there are other facts present that would point to corruption there are laws in place to deal with that. But that’s a different issue.

  9. #9
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    Washington state
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    Default Re: Can a Government Agency Purchase Real Estate for More Than its Appraised Value

    Thank you very much. I was told otherwise, it's good to know the truth.

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