Understanding Appraised Value vs. Assessed Value in Real Estate

When navigating the world of Hingham real estate or the broader South Shore real estate market, understanding the difference between appraised value and assessed value is essential. These two terms are often used interchangeably, but they have distinct meanings and serve very different purposes. Whether you're buying, selling, or just staying informed about your property, knowing these concepts can help you make more confident decisions.

What Is Appraised Value?

The appraised value of a property is its estimated market value as determined by a licensed appraiser. This figure reflects the property’s worth based on its condition, features, and current real estate trends.

Key Features of Appraised Value:

• Purpose: Used in real estate transactions, such as buying, selling, or refinancing a home.
• Calculation: An appraiser evaluates factors like:
  • Comparable sales in Hingham or the South Shore area.
  • The home’s condition, size, and unique features.
  • Local market conditions in Hingham, MA, and nearby towns.
• Frequency: Determined during a transaction or refinancing process.

For example, if you're purchasing a home in Hingham, MA, the appraiser ensures the property’s value aligns with the price you’re paying or the loan amount you’re securing.

What Is Assessed Value?

The assessed value is determined by local tax assessors and is used to calculate your property taxes. This figure is often lower than the market or appraised value, as it's based on specific formulas set by the municipality.

Key Features of Assessed Value:

• Purpose: Primarily used for calculating property taxes in Hingham or other South Shore communities.
• Calculation: Tax assessors consider factors like:
  • Land value and property type.
  • Municipal tax formulas and exemptions.
• Frequency: Updated annually or during local reassessments.

For instance, a home in Hingham with a market value of $800,000 might have an assessed value of $600,000 for tax purposes.

Why This Matters for Hingham Real Estate

In competitive markets like Hingham and the South Shore, understanding these terms is crucial. If you're selling your home, the appraised value helps set a competitive price. If you're buying, it ensures you're making a sound investment. Meanwhile, the assessed value can influence your annual property tax obligations and budgeting.