How is market value defined?

Market value is best defined as the price that a buyer and seller willingly agree upon in an open and competitive market. This definition captures the essence of market transactions, emphasizing the voluntary nature of the agreement between parties who are both acting in their own best interests without undue pressure or external influences.

In a functioning market, market value reflects the collective knowledge of potential buyers and sellers about a property's worth, informed by factors such as current supply and demand dynamics, property condition, location, and overall economic conditions. This aspect of agreement distinguishes it from other forms of value, such as assessed value for taxation purposes, which may not reflect current market conditions.

Understanding market value is crucial for real estate professionals, as it serves as a reference point for appraisals, investment analysis, and pricing strategies.