What is market value?

Market value refers to the estimated price at which a property would sell in an open and competitive market, assuming both the buyer and seller are willing and informed participants. It represents what a knowledgeable buyer is willing to pay and what a seller is willing to accept under normal conditions, without any undue pressure on either party.

This definition is grounded in the concept that market value is derived from actual market conditions and comparable sales, making it a critical measure for real estate transactions. It is distinct from what a seller desires for their property, which may be influenced by personal sentiment or unique circumstances, and from the highest price a buyer might be willing to pay, which can be affected by emotional factors or competitive bidding situations.

Additionally, market value is separate from the assessed value used for taxation, which is often determined by governmental methods and may not reflect current market conditions. Understanding market value is essential for real estate professionals as it helps in setting listings, assessing offers, and determining the fair worth of a property in the current market landscape.