A client of ours planning to sell their home in Hopkinton asked whether they could expect that their home market value would be the same as their assessed value. While these values can be similar, they often are not. Today, I’m pleased to be joined by Robert Bushway, Principal Assessor for the Town of Hopkinton, and home appraiser Steve Elliot of Elliott, Gottschalk and Associates,who illustrate the differences between the two. The most significant difference is the time periods assessors and appraisers look at when determining a home’s value.
“Assessed values are historical in nature,” explains assessor Robert Bushway. “For example, home assessments for fiscal year 2010 are based on sales of comparable homes during the calendar year 2008 and a date of value of January 1, 2009. In a very fluid market, the assessed value may appear higher or lower than today’s market value. For example, assessed values may be higher now since home prices have declined since 2008.”
Alternatively, appraisers focus on comparable sales typically from the past three to six months. “We perform appraisals based on current valuation data,” said appraiser Steve Elliott. “In a rapidly changing market, assessed values can be distinctly different from appraised values because of their different dates of value and the selections of comparables.”
Home appraisers and assessors also differ in the perspective that they bring to their valuation. To be fair and equitable to everyone in the community, assessors need to take a more expansive view. “We paint with a broader brush,” said Mr. Bushway. “If we’re reassessing one home, we look at the whole street and how this might affect assessments there. We avoid spot assessments to be fair to all.”
Home appraisers vary in their approach. “We look at homes on an individual basis, evaluating each home’s quality and condition and comparable sales to develop an opinion of value,” said Mr. Elliott. “The other thing to keep in mind is that some larger cities do ‘mass assessments’. Instead of performing individual assessments, they collect information on large numbers of properties, take a relative sample, and perform statistical analysis to come up with a value.”