Appraised value, assessed value, a comparative market analysis value
3 different methods of a valuation a property with several different reasons for doing them
All of these terms sound related but they are often mistaken for one another and are not comparable. They are entirely different and who does them for what purpose and for how they are used. As a realtor and former Appraiser and having have worked in the assessors office, I do often have property owners asked me to give them an appraisal of the property or ask what do I think the assessed value or assessment should be?
The Appraisal is conducted by federally licensed professional. Typically for the benefit of an estate and or financial reason for a lender to determine if the amount requested to be borrowed is appropriate for the property. The cost for an appraisal is depending on the scope of the work typically the starting price in this area is less than $1,000 can go up to several thousand dollars depending on the zoning of the property. The lenders and attorneys want it independent third-party expertise to confirm that the property is worth that amount of money being loaned so if the buyer defaults on the loan the bank will have an asset upon which they can reasonably be expected to recoup their losses.
Your best option is to use a local appraiser or you can assist the appraiser from out of the area by giving them sold in your area to support your opinion of value. A licensed appraiser is accredited by each state with federal guidelines. Some appraisers are independent contractors, others work for big or small companies. Some appraisers specialize in residential appraisals others in various aspects of commercial real estate. Appraisers use the past sales over the past 6 to 12 months and passed market data over the past six months to create valuations for Properties. They look at the surrounding geographic area other like kind properties and try to focus on properties that have recently experienced selling activity within a mile of the subject property. Appraisers can also be hired by homeowner to get a value for a state for divorce or private sale insurance or determine the worth of a property on replacement cost or on the cost income approach on value and or potential addition or renovations to a property.
An assessment or assessed value are all terms surrounding tax valuation based on past year January 1 to January 1. The data could be up to two years old the rate is in keeping their budget obligations to provide services infrastructure perform repairs and replacements of buildings and pay employees among a host of other duties like providing schools police fire and public safety services. When cities and towns in Massachusetts fall short of their revenue needs they have a few options in addition to laying off or reducing spending etc. They can raise taxes or change the tax rate. Sometimes an across-the-board percentage increase will be introduced so that everyone pays current market value plus some flat percentage. Sometimes a complete reevaluation is done and the homes get updated assessment values. Owner is typically pay taxes based on the location the size and the value of the property they own. There’s a valuations I typically based on past market value but the assessments I don’t update it often, doesn’t change for a long time. That means that as the market heats up and houses sell for more money, the tax assessment made leg behind the market value. On the contrary as the market falls and homes are worth less the contrary is truck. Owners of Properties paid more than market value for appeared of time until an adjustment can be made.
A tax abatement is an attempt to get a temporary reduction of the tax or adjustment of taxes. The most common type of abatement is for property tax, but any form of taxation can be abated. There are several common reasons for a tax abatement, such as over taxation, incorrect town records, new construction, the opening of a new school, hospital, airport or business or natural disaster. Filing a tax abatement is a simple process. If you’re having tax problems getting an abatement can’t be a temporary solution to your difficulties. You also can contact your local assessors office and file an abatement with the help from the assessors office and a local realtor with a free comparative market analysis or in some cases pay for an appraisal from a real estate appraiser.
Real Estate Agents performs a Comparative Market Analysis or Brokers Price Opinion of Value for people who need valuations typically sellers want to determine the starting selling price and to estimate and initial offer. It is typically today not used to get a loan or make an adjustment for taxes or Estates CMA‘s or BPO’s are used to determine a home selling price. Just be aware Appraisals, Assessment and Comparative Market Analysis of Brokers Price Opinion of Value serve different purposes and are done by different kind of license for people and are used for very different reasons. Be sure you were asking for the right professional person for the task at hand.
Gail Hall, Realtor