Definition of "Market value"

When an Appraisal is done, its ultimate goal is to define a Market Value for that property. So, in short, market value is the value of a real estate property in a free competitive market.

Many variables are considered by the Appraiser when analyzing the monetary worth of a property. Supply and demand are the essential factors, but there are others - like structural condition and aesthetic features - that also weigh into the appraiser’s analysis. Sometimes, when a comparative analysis is not enough to assert a price to the house, an Appraiser would use the Replacement Cost and the Income Approach to better evaluate them.

Market Values are not set in stone. Here are three things that can affect it:

- Location, location location. It’s a real estate cliche, right? Because it’s true. A house that is completely identical to another (build-wise) can get sold at a much higher price just because it’s in a premier location.
- Plastic Surgery. You can improve the effective age of your house (and its value) by doing renovations and adding valuable assets to your house. A sauna could not only provide you a good time during the winter, but also bring the market value of your home up.
- Chance. If a trendy retailer sets shop across the street from you, your house may have a spike on its market value. But it could go the other way around too, if - for example - there’s a spike in criminal activity within your area.

The truth is that a comprehensive appraisal keeps an eye on all available information in order to have a clear picture of the property’s value.

Real estate tips: 

Find more terms in our real estate Glossary!

And use The OFFICIAL Real Estate Agent Directory® to find an agent for you!

 

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Real Estate Terms

The spouse's legal right, upon the death of his wife (or her husband), to a life estate in all lands she (or he) owned. ...

Ability of the size of the land to accommodate the desired economic purpose. An example is having enough space to build a supermarket to meet the needs of the community. ...

How one looks at things; opinion. An example is a prospective buyer of a house who considers the asking price to be a great deal. What something looks like at a distance. An example is ...

Number of housing units of a particular category that are available. ...

A property owner who lives in the property he also leases or rent to others. For example, John owns a two-family house. He lives in one side of the house and rents out the other side to the ...

(1) Individual or business that is engaged to do some sort of construction work for another for a fee. There are basically three types of contracting: A general contractor enters into a ...

The definition of obligee is the person to whom a debt or obligation is owed. An obligee is one party of a contract to who the other party, the obligor, is obligated. An obligee is also the ...

Land located next to water that has and will continue to experience water damage. The land generally is not suitable to build a structure on. In some cases, federal or local government may ...

One who sells real estate or other products. ...

Popular Real Estate Questions