What defines market value?

Market value is defined as the most probable price a property would bring in a competitive market, assuming that both buyer and seller are acting knowledgeably and without undue pressure. This definition captures several important concepts of market transactions, including fair competition among buyers and sellers, transparency in information, and a willingness to engage in negotiation based on prevailing market conditions.

The correct answer emphasizes that market value reflects real-world dynamics, particularly the forces of supply and demand. In a competitive market, various factors like location, property condition, and current market trends influence this valuation. By focusing on what a property is likely to sell for in a fair and open market scenario, this definition aligns with real estate practices and helps guide both buyers and sellers in understanding property values.

Other concepts, such as the average price of properties in a neighborhood or the price set by an owner, do not accurately reflect the intrinsic market dynamics. The average price can be skewed by outliers and does not account for individual property characteristics, while the owner's asking price may not reflect actual market conditions. Lastly, the amount a buyer is willing to pay, though important, may not reflect true market value if it is influenced by personal factors that diverge from broader market standards. Thus, the definition provided in the