We had a similar question "how to calculate net worth", and in my answer I noted that for me, the answer would be different if the number was "retirement saving" vs "amount my kids will get when I die."
In the case of retirement savings, I suggested that one's house and any non financial assets should not be included. Consider, you have a house worth $500K. If you plan to use the 4% rule of withdrawals, it would appear to yield $20k/yr of income. The house doesn't do that. Nor does your cars, coin collection, or painting on your wall. A prudent planner wouldn't include any of these in the retirement plan. Owning the house might lower your budget as you have no rent, but it also has costs that add up each year and have to be included in your spending budget.
The above aside, you might insist that you plan to downsize in X years. Going from an expensive area, say NYC or Boston, to a lower cost one, say Austin, and that might give you a one time lump sum. In this case, a planner might include the possibility of that extra money, but until it actually happens, it's not real.
The other "net worth" would include every last possession, and that would be net worth that the kids might get after liquidating your estate.