Which term describes the relationship between assessed values and actual selling prices in real estate?

The term that best describes the relationship between assessed values and actual selling prices in real estate is "sales ratio." This concept directly reflects how well the assessed values correspond to the market values indicated by recent sales. The sales ratio is calculated by taking the assessed value of a property and comparing it to its selling price, providing an indication of whether properties are being assessed fairly relative to what they sell for on the market.

Understanding the sales ratio is crucial for appraisers and assessors because it helps ensure that property taxes are equitable. If assessed values are consistently lower or higher than selling prices, it may indicate a need for reevaluation of assessment practices to align them more closely with actual market conditions. This relationship serves as a key metric in assessing the fairness and accuracy of property assessments within a jurisdiction.

The other terms listed, while relevant to real estate assessments and valuations, do not specifically define the direct relationship between assessed values and selling prices in the context that "sales ratio" does. For example, the sales comparison method refers to an appraisal approach that compares a property to similar properties that have recently sold, while the assessment ratio is a broader statistical measure of overall assessment performance and valuation process encompasses the entire methodology of property valuation.