A sales ratio study checks assessed values against recent sales. Assessors and states use it to measure the roll, not to grade one house in isolation.
A sales ratio study is an assessor or state check of assessed values against recent sale prices, used to measure how close the roll sits to the market. The ratio is assessed value divided by sale price. The study looks at a group of sales. IAAO is clear that those group statistics are not a grade for one house.
What does a sales ratio study measure?
The IAAO glossary defines a sales ratio study as a ratio study that uses sale prices as benchmarks for market values, to measure the level of appraisal. IAAO's Standard on Ratio Studies adds that those statistics cannot be used to judge the level of appraisal of an individual parcel. The test is about the roll's overall level and uniformity.
Example: assessed $200,000 against a $250,000 sale is a 0.80 ratio. A cluster of similar ratios tells the state how the town is assessing. That single fraction is an example of the formula, not a live county study.
Look up if you are overpaying.
Does a sales ratio study replace a property tax appeal?
No. A sales ratio study is a performance check on the mass-appraisal system. A property tax appeal is a later request about one printed value. The property tax glossary keeps the group test next to the one-house number. FairAppeal handles the entire appeal on your behalf when a filing goes forward, and there are no upfront costs with Fair Appeal.