Property Valuation
The most probable price a property would bring in a competitive, open market under fair sale conditions.
Market value is the most probable price a property would sell for in an arm's-length transaction where both buyer and seller are acting prudently, knowledgeably, and without undue pressure. It assumes the property has been exposed to the market for a reasonable time. Market value is not the same as market price (what a property actually sold for), assessed value (used for tax purposes), or insured value (replacement cost for insurance). Appraisals estimate market value.
Exam Tip
Market value assumes an arm's-length transaction. A sale between family members or under duress does not reflect market value.
Study Guide
Property Valuation
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Practice
NY Real Estate Property Valuation
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