What is "market value" in real estate?

Market value in real estate refers to the estimated price a property is expected to sell for under normal market conditions, where both the buyer and the seller have reasonable knowledge of the relevant facts and are acting in their own best interests. This definition encompasses the concepts of supply and demand, current market trends, and reasonable assumptions about the property’s condition and financing availability.

When assessing market value, it's important to consider that it's not just about what sellers want or what buyers might initially offer, but about a fair and realistic price based on comparable sales, broader economic factors, and market dynamics. Thus, it reflects an accurate appraisal for the property in question, rather than personal expectations or averages that may distort perception.

In contrast, the maximum price a seller wishes to sell captures only the seller's personal stance, the lowest price a buyer would pay reflects only the buyer's perspective, and the average price might not truly represent the market dynamics of individual properties. These alternative definitions can lead to misunderstandings about a property's actual market position.