Property Tax Guide

How Appraisers Actually Value a Home (and How to Use It in Your Appeal)

Published October 5, 2026

Every assessed value starts as an opinion of market value, and every professional opinion of value is built the same basic way. Knowing how appraisers value a home tells you where your county's number came from, and where it's most likely to be wrong. Appraisers and assessors work from three standard methods, called the approaches to value. Once you know them, you can pick the evidence that actually moves a review board.

The short version: for an ordinary house, value comes mainly from what similar homes sold for. The other two approaches are cross-checks. Your best appeal attacks the number the way the assessor built it, with better sales and better data about your house.

Approach	The question it answers	IAAO rank for single-family homes
Sales comparison	What did homes like this one actually sell for?	1 (the best approach)
Cost	What would it cost to rebuild this house today, less wear and age, plus the land?	2 (supplemental; primary when sales are scarce)
Income	What would this property earn as a rental?	3 (usually inappropriate for homes)

The rankings come from Table 1 of the International Association of Assessing Officers' (IAAO) Standard on Mass Appraisal of Real Property, the professional standard most assessors work to.

1. The sales comparison approach

This is the workhorse. The appraiser finds recent, closed, arm's-length sales of homes similar to yours, then adjusts each sale price for differences: an extra bathroom, a finished basement, a bigger lot, a sale that happened months before the valuation date. The adjusted prices point to a value for your home.

The IAAO standard calls it "the best approach" for single-family homes, including condos. Mortgage appraisal works the same way. Fannie Mae requires at least three closed comparables in an appraisal's sales comparison approach, normally sales that closed within the last 12 months.

In your appeal: this is your main evidence. Three or four well-chosen, honestly adjusted comps beat anything else you can bring. Our guide to comparable sales covers how to choose and adjust them.

2. The cost approach

The cost approach builds value from the ground up:

1. Estimate what it would cost to replace the house today with one of equal usefulness, at current construction prices.
2. Subtract depreciation, meaning the value lost to age, wear, an outdated design, or outside problems such as a busy road.
3. Add the land value.

The IAAO standard says this approach is more reliable for newer houses built of standard materials, and that the hardest parts are estimating land value and depreciation, which "can involve considerable subjectivity."

In your appeal: that subjectivity is your opening. A county's cost tables assume typical wear for a house of your age. If your roof is near the end of its life, the foundation has settled, or the kitchen dates from decades ago, the model may not have depreciated your home enough. Dated photos, inspection reports, and contractor repair estimates turn "it needs work" into evidence.

3. The income approach

The income approach values property by the rent it can earn, converted into a value with a multiplier or capitalization rate taken from sales of similar rentals. It drives the value of apartment buildings, offices, and stores. The IAAO standard calls it "usually inappropriate" for single-family homes because most aren't rented. If you live in your house, you can mostly ignore it.

Why mass appraisal misses on individual homes

A mortgage appraiser values one house, usually after walking through it. Your assessor values thousands at once with mass appraisal: a model calibrated on local sales, applied to whatever data the county has on file for each property. Between visits, values are typically updated by recalibrating the model or applying market adjustment factors. The IAAO standard notes that "only physical reviews can correct data errors," and calls for property characteristics to be reviewed at least every 4 to 6 years.

The standard also allows some error in the data. It recommends that living area be accurate within 5 percent, that at least 95 percent of factual entries such as bathroom counts be right, and at least 90 percent of judgment calls such as quality grade and condition. That's good accuracy across a whole county, but on any one house a wrong square footage or an "average" condition grade on a worn-out home can push the value up.

How to use this in your appeal

1. Get your property record card from the assessor and check every line: square footage, bedrooms, bathrooms, basement finish, garage, lot size, quality grade, and condition. A factual error is often the easiest fix.
2. Lead with sales comparison. Work out the market value your assessment implies (our over-assessment check shows how), then compare it with three or four close comps.
3. Back up condition with evidence, borrowing the cost approach's idea of depreciation. Show the problems a model built from data can't see.
4. Skip the arguments no approach supports. Your tax bill rising, the tax rate, or what you paid years ago aren't evidence of today's market value.
5. Check your state's rules before you file: the deadline, any assessment cap, and whether the board can raise your value. Your state's property tax appeal guide covers all three.

PROppeal runs the sales comparison approach for you. It pulls licensed sale records for your address, applies your state's ratio and cap rules, and tells you plainly whether the comps support an appeal, including when they don't.

Property tax rules and deadlines vary by jurisdiction and can change — verify with your county before relying on this.