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

Person protecting himself from risk or negative consequences, such as by taking out homeowner's insurance. Material used to block or restrain something from entering a house, ...

Real estate property incentive offered for reasons other than individual merit. A discriminatory inducement is an effort to get an individual to buy or sell, rent, or lease real estate ...

Sewer system built into the streets of a neighborhood that is capable of accommodating the excess water flow of a heavy storm without backing up or flooding. ...

Statue designed to protect lenders if a seller secretly sells substantially all of the business property. The objective of the law is to safeguard against defrauding creditors. ...

Refinancing seems easy to understand but is it really? Here’s a lengthy refinancing definition so you can make up your mind once and for all regarding the exquisiteness of the ...

One of a series of inclined structural supports supporting a roof. ...

property suitable for residential living, such as a house, duplex, apartment, mobile home, or condominium. ...

Average of what savings institutions in the 11th district of the Federal Home Loan Bank System ( California, Arizona, and Nevada) are paying in interest to depositors and other sources of ...

The third-party definition refers to an individual or entity in a transaction but is not the buyer or the seller. Usually, a third party has some role in the transaction. They do not have ...

Popular Real Estate Questions