When I determine the value of my house I guess what it would sell for quickly without improvement or a long time on the market. So how cheap would I have to sell it to move it quickly. Second, I subtract realtor fee and any moving expenses, so maybe 7%? In other words, if I moved out tomorrow and set myself up in a rental, and sold the house quickly using a realtor, how much cash would I get at closing. That is the value of my house in regards to net worth I use. That brings the number down a bit, which I want so that I don't start overestimating my net worth. Eventually I won't be living in our current house, so the top amount somebody might pay for it doesn't matter. I need to know the rough minimum cash I might end up with after selling, closing, and moving somewhere else.
That doesn't mean I won't eventually try to sell without a realtor, and won't try and get top dollar, and make improvements, etc. But those numbers are what I hope to get. For net worth I want a minimum value, not best case scenario.