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It is an objective opinion of value, but it is not an exact science, so appraisals may differ. For buying and selling porposes, appraisals are usually based on market value----what the property could probably be sold for. Other types of value include insurance value, replacement value, and assessed value. Appraised value is not a constant number. Changes in market conditions can dramatically alter appraised value. Appraised value doesn't consider special cinsiderations, like the need to sell quickly. Lenders most always use appraised value to determine the amount of mortgage they will offer. Estimates of real property values are called assessments. Real estate taxes are apportioned to individual properties based on the actual market value of the property. There is no such thing as low taxes on any property. Within a year or so of a sale, a property is likely to be reassessed based on the actual price. Assessors discover value and ensure that assessments reflect the changes occurring in the marketplace. People create property value by their transactions in the market. Assessments must be set at market value, therefore rising real estate values will be reflected in generally higher assessed values. What Is Market Value ? Massachusettts law defines market value or fair market value as the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Market value is predicated upon neither buyer nor seller acting under duress. There is a difference between market value and market price. The latter is the amount paid for the property. It may be either higher or lower than market value. Price is what you pay.Value is what you get. Copyrighted by the Milton H. Shaw Real Estate Handbook Eighth Edition |
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