The 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. Size, type, and quality of construction, number of rooms, baths, fireplaces, type of heating – all are examples of the data listed on individual property record cards. 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 physically inspect all properties that sell to make sure the data used to assess the properties is correct. The assessed values are then compared to the sale prices of the properties. Adjustments are than made to the value tables. 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 tolerance levels for all property types and sizes. 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. 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. The revised values then fairly and equitably reflect the market value for all the properties in the town.
Assessors do not create value. Their responsibility is to discover, analyze, and reflect the value changes that are occurring in the market place.