Appraisal or Assessment: What’s the difference?
As a Real Estate Agent, discussing appraisals and assessments is just part of the job. Often, the terms are conflated so I will be setting the record straight as far as what the differences are & why both are important in the home buying & selling process.
Appraisal: A valuation of real property to determine the current market value.
In Massachusetts, a licensed appraiser views the subject property & then checks the historical sales data to find comparable sold properties to determine the current market value. They are tasked with making adjustments for upgrades, square footage & other differences to best evaluate the property. This valuation is written up into a confidential report, typically provided to the lender prior to underwriting a borrower’s mortgage.
In the frenzied market we are currently experiencing in central Massachusetts, homes in many price points are often selling over the asking price, thus making the appraiser’s job more difficult as prices continue to rise.
Assessment: A valuation of real property to determine property taxes due a specific municipality.
As a homebuyer, the assessment and the municipality’s tax rate are worth considering. Property taxes can make a difference in affordability. Unlike an appraisal report, this information is part of the public record too so anyone can find out what a home’s assessed value is & the annual property taxes.