Q: What is mass appraisal?
A: Assessors must value all real and personal property in the community to their full and fair cash value. Mass appraisal is the process, used by all Massachusetts cities and towns, to create the property assessments. Assessments are based on an analysis of Pittsfield’s entire real estate market for a specified period of time. This study guides the setting of valuation parameters that are used to calculate the property values city-wide. It differs from the more well-known “bank” or fee appraisal. Although the appraisal concepts are the same and the results similar, the process is different. No particular sale or group of sales is used to determine the value of your property, but all of a certain calendar year’s sales are included in the analysis that set the parameters for the next fiscal year.
Q: What is market value?
A: Market value, or full and fair cash value, is the most probable price for which a property will sell in an open, competitive market that a willing buyer will pay for a property to a willing seller, both acting knowledgeably and prudently and neither being under any obligation to buy or sell. Sales such as foreclosures and family sales are not considered to be “arms-length” or fair market transactions.
Q: When my neighbor’s house sells, will their price determine my assessment?
A: Not necessarily. As explained in the previous question, sales are analyzed city-wide. An example of what could be relevant is if there were several sales in an area indicating that the assessments were too low or too high compared to the sales prices.
Q: How often does the valuation of properties change?
A: Every year the Assessors subject the “arms-length” sales that occurred in the prior calendar year through a statistical examination based on market area, style of house, age of house, effective area, size of lot and sale price to see what changes the market has shown. The tables used in the Computer-Assisted Mass Appraisal (CAMA) system are adjusted so that the median assessment of the sales sample is within 10% of 100% of market value, and the dispersion of the assessments to sales ratios in the sample are within state guidelines. These new factors are then applied to all properties for the new fiscal year. Every fifth year the Department of Revenue (DOR) requires each city or town to conduct a revaluation. This is a year-long process during which the DOR examines every phase of the assessing operation before certifying the values. During the two years in between revaluations, the Assessors may change the values if sales activity so indicates. These yearly updates are called Interim Year Adjustments.
Q: How is the calendar year different from the fiscal year?
A: Massachusetts cities and towns operate on a “fiscal year” basis. The calendar year runs from January 1st through December 31st. The fiscal year runs from July 1st through June 30th. The assessment date is January 1st preceding the fiscal year. For Fiscal Year 2019, the assessment date is January 1, 2018.
Q: Where can I find the detail on my property?
A: Property record cards, which contain ownership information, owner history, land and building details, and other notes, and which display a property’s valuation, are available in the Assessors’ Office, Room 108, 70 Allen Street, Pittsfield, MA. There is a five cent charge for each property record card. You can also view many of these details on-line by clicking here free of charge.
Q: What do the assessors look at when determining assessment?
A: The Assessor collects many data elements about a property in order to develop the total valuation. The most significant factors in determining the value are location and land area and style, quality, size, condition and age of the building(s). Other factors include amenities or detriments on the land as well as features in the building such as number of bathrooms, type of heating/cooling, interior/exterior finishes, and special features including fireplaces, saunas and Jacuzzis. Also considered are detached structures.
Q: How do I know if my valuation is fair and equitable?
A: The best comparisons are to properties that have sold that are the most similar in the most aspects to your property. You can also compare your property’s assessment to the assessments of the most similar properties. Although properties will most likely never be a perfect match, assessments for similar properties should fall in a close range of valuations.
Q: How can my assessed value increase/decrease when no physical changes have been made to the property in years and I am not selling the property?
A: The assessed value represents the estimate of market value of the property. The real estate market changes constantly. The assessment for Fiscal Year 2019 represents the estimate of market value as of January 1, 2018. This estimate of market value is determined by examining sales of properties from calendar year 2017. Although there may not have been any physical changes to the property, buyers may be paying more or less for properties than they were in previous years. The assessment changes reflect the changes in the purchase prices of similar homes in the neighborhood. The assessments do not predict market value. The assessments reflect (historic) market value. The real estate market can change dramatically from year to year. Buyers and sellers determine the market value of properties. The assessments reflect what the buyers and sellers are doing as of the assessment date.
Q: What will happen if I put an addition on my property?
A: Historical sales have indicated that larger properties sell for more than smaller properties with all other factors being equal. If an addition is put on a home, the house becomes larger. The Board of Assessors would then have to see what similarly sized properties were selling for in the neighborhood. It is highly likely that the assessed value of your property will increase once the addition is put on the property. Generally speaking, improvements that increase the market value of a property will increase the assessment.
Q: Why did my valuation change from the prior year’s valuation more/less than my neighbor’s?
A: Market value changes occur in many forms. From year to year economic conditions and local factors change and influence the values of different classes of property in different ways. Buyers have different requirements and these requirements sometimes change from year to year. Renovations may have been performed on a property that would cause a change in assessed value different from a similar property that did not undergo renovations. A recent inspection by the Assessors’ office also may have contributed to a change in assessed value, perhaps adding something that had been missed or reducing something that was overstated. Your style or size or land area or other factor(s) may differ from your neighbor’s and that caused the valuation changes to differ.
Q: I recently purchased my home for a price which is different than the valuation for this year. How is this possible?
A: The real estate market is not a “perfect market” and price is not always equal to value. Similar properties usually do not sell for exactly the same price because the motivations of buyers and sellers are not always similar. Similar properties usually tend to sell within a “value range” rather than for one specific price. According to the definition of fair market value, your value represents “the most probable selling price” and tends to be the middle of the range of what similar properties have recently sold for. Therefore, your appraised value could be higher or lower than what you actually paid for your property. In addition Massachusetts General Law requires that real estate be assessed at 100% of market value as of January 1st immediately preceding the current fiscal year. This is the assessment date. The sales considered in order to determine the market value are those that took place during the calendar year prior to the assessment date. If your sale took place subsequent to the assessment date, it will be in the group of sales analyzed in the preparation of the following year’s valuations, and is not relevant to the current year’s valuation.
Q: Why does the Assessor need to enter my house?
A: A total inspection of all factors that influence the value results in the most accurate assessment of a property. We request the inspection in order to be as fair and accurate as possible. Items such as condition of the rooms, quality of the finish, areas of finished versus unfinished, can only be confirmed with an interior inspection. Without actual information, estimates of the interior information have to be made.
Q: Will an inspection change the value of my house?
A: Depending on the accuracy of the current data about the property, it may or may not.
Q: What happens if I refuse to allow the Assessor to enter my home?
A: You do not have to allow the Assessors into your home. However, if an Assessor is denied entrance, property owners lose their right to challenge the assessed value.