A Realtor when doing a market anaylsis to determine correct pricing for a home will look at what similar homes in the area have SOLD for to determine a listing price. With that being said, it really is what a willing and able buyer is willing to pay for a home. Assessed values are not good indications of the value of a home's worth. If the home was purchased 25 years it's very posible that value is low. Now, considering values have dropped in many areas, it's possible that value is high.
Hire a qualified buyers agent to determine what homes are selling for in that area and use that information when/if you decide to make an offer.
If you'd like a few names of excellent Realtors in your area click on this link: http://www.clickthishome.com
and then on "Contact Us".