What is the Sales Based Average Ratio?

The Sales Based Average Ratio is a critical concept used in property assessment to evaluate the relationship between a property's assessed value and its sale price. The correct answer reflects that this ratio involves calculating the total assessed value of all properties and dividing that by the sum of all sale prices. This provides insight into whether properties are being assessed at fair market values in relation to actual sales.

This ratio is particularly useful for assessors to ensure that property assessments are in line with current market conditions. If the total assessed value of properties is significantly different from the sale prices, it suggests that adjustments may be needed to ensure fairness in property taxation.

Understanding this ratio helps assessors and stakeholders identify trends in the market and make informed decisions about property valuations. It allows for benchmarking of appraisal practices and can indicate whether typical sale prices are being reflected appropriately in assessed values.