Recently, I was asked about the different values assigned to a Boston condo. Here’s a quick rundown of the various ways of valuing Boston real estate:
REAL ESTATE: MARKET VALUE
Simply put, this is what a buyer is willing to pay for a downtown Boston condominium. A real estate broker will use their knowledge of the market as well as a comparable market analysis of recent sales of similar properties to give a range of value for a specific property; however, there is both an art and a science to this process so each Boston real estate professional may have a different opinions of value.
REAL ESTATE: APPRAISED VALUE
An appraisal takes place if there is financing being obtained on a Midtown condo. Basically, a lender wants to be sure that the home is worth what the buyer is willing to pay, as they will be holding a mortgage on the home as collateral for their loan. Appraisers traditionally will create a radius around a property and select 5-6 comparable condos that have sold, and add or subtract value based on the finishes, overall condition, and basic specs of the Beacon Hill property. If the appraisal is for financing purposes, it is important that the property appraises. If it does not, the lender may deny the loan.
REAL ESTATE ASSESSED TAX VALUE
This is an assessment done for tax purposes. The county tax assessor’s office places a value on each property to ascertain what the tax on each property should be. Often the county tax value does not align with the market value of the home. This is because there are no laws in Texas that require the disclosure of what homes trade for. As a result, the taxing entity is often relying on incomplete information to calculate assessed tax value, its usually lower than the market value.
