How do the assessors determine value?

Assessors are required by Massachusetts law to value all real and personal property at its “full and fair market value”, the amount a knowledgeable, willing buyer would pay a knowledgeable, willing seller on an open market. Assessors first inspect each property to record specific features of the land and buildings that contribute to the property’s overall value. Living area, construction style, the year built, quality of construction, number of rooms, baths, fireplaces, type of heating – all are examples of the data listed on individual property record cards. By state regulation, each structure in town must be inspected at least once every nine years to verify the data on the record cards.

Finding the “full and fair market value” of a property involves discovering what similar properties are selling for on the open market. Assessors make an effort to physically inspect all properties that sell to ensure that the data used to assess the properties is correct. The assessed values are compared to the validated sale prices of the properties and then, if required, adjustments are made to the valuation tables in the mass appraisal system. A mass appraisal system is basically a computer model of the marketplace for all types of properties and buildings.

This process continues until the resulting assessed values approximate the sale prices. A statistical analysis is then conducted on the ratio of the new assessed values to the sales prices to ensure that the new values meet acceptable ratio levels for all property types and sizes, as directed by the Department of Revenue’s (DOR) Local Services Division. Valuation techniques for commercial and industrial properties also include analysis from an investor’s point of view, since the purchase price a buyer is willing to pay depends to a large extent on the return (profit) they expect to receive from purchasing and then leasing out the property.

The use of yearly income and expense mailing requests assists the assessors in gathering the data needed to determine average local costs and profits for all types of properties in town. When the statistical analysis confirms that the revised values represent the fair market value of the properties that sold, the new value tables are applied to all the properties in the town in the mass appraisal system. The revised values should then fairly and equitably reflect the market value for all the properties in the town.