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!
Popular Real Estate Terms
Space just below the roof of a house, barn, or other structure. Upper story of a factory or warehouse. ...
A forced sale or forced liquidation typically means an involuntary sale of valuables or property for financial reasons. If an unpredictable or uncontrollable event emerges, a seller must ...
(1) Anything of value given to induce a person or entity into entering a contract. It may be money, personal services, or the trading of property. A valid contract requires adequate ...
Legal right of the buyer of real estate for the acquisition price paid if the seller does not render the deed to the property. The buyer's lien is not only for the purchase price paid but ...
The maximum pre-approved amount that an individual or business can borrow without preparing a new credit request. It is a safety buffer in the event funds are needed for unexpected ...
Same as term spot zoning: Zoning a portion of land in a given area for different purposes than its surrounding functions. For example, a locality may decide to spot zone a vacant lot in a ...
Also called demand note. A loan with no established maturity period, callable on demand by the lender for repayment. The interest on this type of loan is calculated on a daily basis and ...
A clause that may be inserted in a listing agreement stating no commission will be paid to the broker until the property title has actually been transferred. Normally, willing and able ...
Where property is sold to the highest bidder. ...
Have a question or comment?
We're here to help.