What is the definition of "market value" in real estate?

Market value in real estate refers to the price that a property is expected to sell for under normal conditions in a competitive market. This definition encompasses the idea that the sale occurs between willing buyers and sellers who have both sufficient information and act in their best interest, devoid of any undue pressures—such as foreclosure or distress sales.

The concept of normal conditions implies an environment where no extraordinary circumstances distort the price. Market value is usually determined by various factors like location, property conditions, and the current real estate market trends, ensuring it accurately reflects what buyers market will pay for similar properties at a given time.

Understanding market value is crucial for buyers, sellers, and real estate professionals, as it serves as a benchmark for pricing properties, making informed investment decisions, and negotiating sales. It differs from assessed value—which is used for taxation—and minimum seller acceptance or average pricing, which do not account for the dynamics of willing transactions in a healthy market.