What does "market value" represent in real estate?

Market value in real estate represents the price a property is expected to sell for in an open market. This concept reflects the highest price that a willing buyer would pay to a willing seller, both acting without undue pressure and having sufficient knowledge of the relevant facts. Market value is crucial because it informs buyers, sellers, and investors about the current worth of a property based on actual comparable sales and market conditions.

This value is typically determined by a variety of factors including location, property condition, market trends, and economic considerations. It is distinct from other values, such as assessed value, which is often used for taxation purposes and may not accurately reflect current market conditions. Additionally, unlike the minimum price a seller is willing to accept, market value is not just about the seller's perspective; it incorporates the broader market dynamics and buyer behavior.