What a home is really worth: value and pricing, explained

01Assessed value and market value are two different numbers

Every property carries more than one "value," and the two quoted most often are not the same thing.

Assessed value is the figure your town or city sets for tax purposes. It is produced in bulk, often on a lag, and its job is to split the tax bill fairly, not to predict what a buyer would pay this month. In Massachusetts, for instance, each city and town sets its own assessments, and they can trail the live market by a year or more.

Market value is what a willing buyer and a willing seller would actually agree on today. It moves with demand, interest rates, and condition. When the market runs fast, the two numbers can drift a long way apart.

02A modeled estimate is a range, not a single number

Type an address into any tool and a value pops out. The real question is not "what is the number," it is "how sure is it."

A modeled estimate reads patterns in past sales and property traits. It is a smart guess, and every guess carries a margin. That is why a modeled estimate is shown as a band, a low and a high, rather than one confident figure.

A single value carried out to the exact dollar looks precise. It isn't. That kind of false precision is theater. A range tells you the truth: the value sits somewhere in here, and this is how wide "somewhere" is. It should also be dated, because a value is only as current as the sales behind it.

A number without a range is a guess wearing a suit.

03Comps are the closest thing to real evidence

Comparable sales, or "comps," are recent sales of similar homes nearby. They are the closest thing to hard evidence about value, because a recorded sale is a price two real people actually agreed on, not an opinion.

Good comps sit close on the things that matter, and the further a comp drifts from your home, the more you have to adjust and the shakier the read. In a quiet area with few recent sales, your evidence is thin and your range should be wide.

• Recency: a sale from last month beats one from two years ago.
• Proximity: the same street tells you more than the same town.
• Likeness: similar size, style, and condition, or adjust for the gap.

04Price per square foot is a shortcut, not a verdict

Price per square foot is easy to calculate and easy to abuse. Take the price, divide by the finished area, and you get a tidy number that feels like a fact.

It is a rough sanity check, not a verdict. It quietly ignores condition, layout, lot size, light, and location, the very things that make one home worth more than another of the same size.

Use it to compare like with like: two similar homes, same street, same era, same shape. Stretch it across a renovated home and a tired one, or a big house and a small one, and it starts to mislead. Larger homes usually carry a lower price per foot, and that is normal, not a discount.

05An appraisal is a person, an estimate is a pattern

An estimate and an appraisal both put a number on a home, but they come from very different places.

An estimate is automated. It reads data and patterns, costs little or nothing, and updates in seconds. It is a fast starting point, and it never walks through the front door.

An appraisal is a licensed person. They visit, judge condition and quality, weigh the comps by hand, and write a number they can defend. In most financed purchases a lender orders one, and that figure carries real weight in the deal.

Neither is "the truth." An estimate is quick and wide, an appraisal is slow, specific, and accountable. The skill is knowing which one the moment calls for.

06The list-to-sale ratio shows who holds the leverage

The list-to-sale ratio compares the final sale price to the asking price. It is a plain gauge of who holds the leverage right now, buyers or sellers.

When homes routinely sell for more than they asked, the ratio runs above the break-even point and the market is hot: competing offers, quick deals, little room to haggle. When homes sell for less than asking, the ratio slips below it and buyers gain room to negotiate.

Read it as a temperature for a place and a time, not a promise about your transaction. It shifts by neighborhood, by price band, and by season, so a hot town-wide figure can still hide a cold corner, and the reverse.