The value of property is most commonly understood as the price someone will pay for it.
In real estate, however, value is reflective of a specific definition of value known as market value. This definition is typical for lending purposes.
Market value of property means the most probable price which a property should bring in a competitive and open real estate market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus.
Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:
In every appraisal, the market value must be clearly defined.
In short, the term ‘market value’ in an appraisal is specific to the market (i.e multiple potential buyers), not just one buyer who is atypically motivated.
It is a common misconception that market value is whatever someone is willing to pay, however. That is actually “market price”, which is similar to what one pays at a concession stand in a movie theater or sporting event or what one pays for a special fresh fish in a high end restaurant which has a limited supply of that menu item.
REAL ESTATE APPRAISER
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