Valuation in Massachusetts is based upon "full and fair cash value,” that is, the amount a willing buyer would pay a willing seller on the open market. Assessors must collect, record, and analyze a great deal of information about property and market characteristics in order to estimate the fair market value.
Assessors first inspect each property to record specific features of the land and building(s) that contribute to its value. Size, type and quality of construction, number of rooms, baths, fireplaces, type of heating system - all are examples of the data listed on individual property record cards. Once a house or business building is inspected, the assessor may not need to reinspect for another 6 to 9 years.
Finding the "full and fair cash value," or "market value" of a property involves discovering what similar properties are selling for, what the property would cost today to replace, and what financial factors, such as interest rates, may be affecting the real estate market. Valuation techniques for commercial and industrial properties also include analysis from an investment point of view, since the purchase price the buyer is willing to pay depends in part on the return he or she expects to receive.
The assessors do not create value. Rather, they have the legal responsibility to discover and reflect the changes that are occurring in the marketplace.