What is the Market Value Definition for Real Estate?
The market value definition for real estate is the most probable price a property would bring in an open and competitive market, assuming the buyer and seller are acting prudently, knowledgeably and assuming the price is not affected by undue stimulation. Market value for real estate is an estimate made by an appraiser of the monetary worth of a property based primarily on the highest and best use of the subject property.
What Does a Market Value Estimate Include?
A market value estimate includes several components, including:
- Location – Where is the property located? This can affect property values significantly.
- Property Type – The type of property will determine what comparable properties in the area sell for.
- Condition of the Property – The condition of the property will also factor into the market value estimate.
- Current Market Conditions – The current economic conditions in the area can affect the value of the property.
- Prospective Buyers – Knowing who is looking to purchase the property can help you set an accurate value.
The market value definition for real estate is closely linked to the factors outlined above: location, property type, condition of the property, current market conditions, and prospective buyers. All of these must be taken into consideration when determining the market value of a property. By doing so, you can set accurate prices and ensure that buyers and sellers can both benefit from a successful real estate transaction.