What is the definition of market value in appraisal counseling?

Market value in appraisal counseling is defined as the price a property would sell for in an open market, where both buyers and sellers have reasonable understanding of the relevant facts and are not under any pressure to act. This concept emphasizes the conditions that need to be met for a sale to be considered fair and reflective of the true worth of a property. It represents an estimate of the price that would be agreed upon by a willing buyer and a willing seller.

This definition effectively captures the essence of real estate transactions, where factors like competition, economic conditions, buyer motivation, and seller’s needs all influence value. Market value is pivotal in the appraisal process as it guides valuations and investment decisions by reflecting current market dynamics rather than historical sales data or construction costs. Understanding market value is essential for accurately assessing property worth in the context of current market conditions.