Assessing the Value of a Home

Real Estate Agent with The Buyers' Counsel

House with money

 I was recently asked about the connection between a property's assessment value and its potential selling price.  There is often confusion about the various methods that are used to evaluate property and it's important to be able to distinguish between them and to know how they may be helpful to you in your home buying decision.

Property Assessment - The assessment is a tool the town uses to determine your property tax amount.  In Massachusetts each town has an assessor who is responsible for determining the value of each property and its improvements.  The assessor reviews sales data from the previous year and, based on sales prices of similar homes, will arrive at a value for each parcel.  With today's declining real estate market, assessments do not necessarily reflect a property's fair market value since the data used may not be up-to-date or accurate. Because of this, it is not unusual to see a home listing with an assessment that is higher than the asking price.

Comparative Market Analysis - Real estate agents establish fair market value by compiling a report called a CMA or Comparative Market Analysis.  This analysis is based primarily on comparable properties that have sold in the same neighborhood, of a similar size and style and of a similar age.  The sales should have taken place no longer than six months ago to be valid comparable sales.  The analysis will also take into account properties that are currently on the market, under agreement and also those that have expired.  The goal of the CMA to a buyer agent, is to establish an offer price that is the lowest possible that a seller might accept. 

Appraisal - When you have an accepted offer on a property your bank will hire an appraiser to arrive at an estimate of value for the property you will be using as collateral for your mortgage loan.  An appraiser is licensed and trained in the practice of developing an opinion of value for real property known as Market Value.  Similar to the CMA, the appraiser will base the property value on three recent sales of similar properties in the same area that have sold over the past six months.  A professional appraisal is detailed and includes land to value ratio, general real estate conditions in the area, zoning information and a sketch of the property showing the layout of the rooms. 

All three methods of property valuation will factor into your home purchase. 

  • The Assessment will assist you in calculating the property taxes,
  • Your realtor's Comparative Market Analysis will help you to arrive at an appropriate offer price, and
  • The Appraisal amount should support the price you are paying for the home.

Related Posts:

Home Warranties, Are They Worthwhile?

Real Property vs. Personal Property - What is Included in a Home Purchase?

Property Disclosure - Who Has the Burden of Proof?

Copyright 2009 - Claudette Millette, President, TheBuyersCounsel -  800-392-1446, E-mail    

Learn More about Massachusetts Home Buyer Representation - Greater Boston and MetroWest Massachusetts -  Serving Massachusetts Home Buyers Since 1992 

  Ashland, Holliston, Hopkinton, Natick, Newton, Northborough, Framingham, Sherborn, Southborough, Sudbury, Wayland, Westborough 


Posted by


Comments (2)

Gerry Khatchikian
Red Lodge, MT


Good post and explanations.   This is useful to help customers understand the purpose and the difference between the 3 methods of valuing a home.

Jan 21, 2009 09:37 AM
Jim Mushinsky
Centsable Inspection - Framingham, MA

Hi Claudette.  Thanks for the information.  How does the condition of the home figure into the value?

Say its a 50 year old home that has had many updates and repairs compared to the 50 year old home with few updates and repairs?   I don't think the assessor's office looks at those things. Do they?

Feb 06, 2009 06:50 PM