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

Said of property that is bought subject to the existing loan against it. ...

The Women’s Council of REALTORS® is one of the affiliate organizations of the National Association of REALTORS® (NAR). This nonprofit organization is a network of successful ...

A narrow passageway between buildings providing secondary rear access. ...

Also called functional depreciation. Loss of value that results from improvements that are inadequate, outdated, overly adequate, or improperly designed for today's needs. May be curable or ...

Federal act passed in 1974 regulating mobile homes. The act defines a mobile home as a "Structure, transportable in one or more sections, which is eight body feet or more in width and is ...

Agreement between two or more individuals whereby each party agrees to do or not to do some act. The parties have reciprocal obligations of performance or actions. ...

Scarcity is a fundamental term in economics, mirroring the limited resources and needs gap. The shortage demands consumers to make logical decisions on spending their money efficiently. ...

Name given by the Realtors National Marketing Institute which is affiliated with the National Association of Realtors. ...

Title deficiency that prevents a seller from successfully transferring property to a buyer. A title company may discover a title defect ( due to encumbrances against the property or failure ...

Popular Real Estate Questions