The Palmer Group

Don’t Be Mislead By Assessed VS Fair Market Value Comparisons.

Massachusetts Assessed Home Value VS Fair Market Value.

Massachusetts Assessed Home Value VS Fair Market Value.

In the luxury towns we work in and in most Massachusetts towns, determining a property’s fair market value based on the town’s assessed value for the land and buildings can be largely inaccurate.

Often times the general public is confused about the numbers because realtors fail to educate their clients on the significant difference between the two figures.  We often find that looking at the assessed values is about as accurate as using Zillow.com to figure out what a home is worth.  If you have done any research on Zillow, you already know how inaccurate their home values can be.

If realtors spent more time educating clients about the difference between a home’s assessed value and it’s potential market value, there would be  less confusion for buyers.

Property’s assessed value – is the valuation placed on a property by a public tax assessor for the purposes of taxation.  Assessed values are nothing more than a yard stick for the public municipality to collect an appropriate amount of taxes to sufficiently cover the state and local appropriations chargeable to the city or town.

Property’s Fair Market Value – is the agreed upon price between a willing and informed buyer and seller under the usual circumstances.  It is the highest price which the property will bring when exposed for sale on the open market to a buyer who is purchasing with full knowledge of the property’s highest and best use.

How looking at the assessed value can be helpful – sometimes it can be helpful in the financial analysis of a property to look at what comparable homes have been selling for in relation to their assessed values.

If you have ten comparable homes in an analysis and all the homes have been selling about 10% above the assessed values, it provides you with  another data point.  It should not be the only method used to determine potential market value but could be useful in helping you identify red flags.

For example, in the analysis of the ten homes above, one home sold 40% above the assessed value but all the others were around 10%. of the assessed value.  There may be some logical reasons for this occurrence, such as recent updates and improvements not yet assessed by the town.  Buyers should view this as a red flag and make sure they do some additional research on why the property sold where it did before they consider purchasing it.

Some owners are proud of the fact that they have been successful at keeping the assessors out of their home over the years.  The intent is to prevent them from having to pay higher taxes.  However, this can actually hurt a seller when it is time to market and sell their property.  A home being marketed with a sales price significantly above the assessed value as compared to other comparable homes can point to several red flags.

If you think the assessed value on your home and property is to low or to high, we can help.  For a free analysis and information on your assessed value, Contact Us Now or email us at [email protected].

You would be surprised at how many clients we’ve helped with this issue over the years.

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Related Topics:
The Mystery Behind Boston Residential New Construction Sq. Ft. Costs.
Buying A Home Does Not Have To Be A Stressful Event.
Want To Know What Your Property’s Development Potential Is?
Is Your Massachusetts Home Not Selling? Don’t Be Afraid To Ask For A Second Opinion.

 

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