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

(1) Judges remark in a court ruling not in and of itself embodying the law. A dictum merely illustrates or amplifies the ruling. (2) Arbitrator's ruling. ...

making land more beautiful to look at by adding improvements such as lawns, trees, and bushes. Increases the value of the property. ...

See accommodation endorser, maker, or party. ...

Device that cuts off an electric circuit when the current becomes to strong. ...

Map which documents the area, perimeter location, dimensions, and other data relating to land for purposes of assessing annual real estate taxes. ...

Tendency to go to the party or situation of the lowest level of opposition. ...

The arrangement of the walls and rooms in a structure. A two-dimensional horizontal scale drawing of the arrangements, size, and orientation of doors, rooms, walls, and windows of a single ...

Documentation of zoning requirements and changes thereto. ...

Expenditures incurred to initially purchase property, including incidental costs necessary to put the property into existing use and location. This cost is then depreciated over the assets ...

Popular Real Estate Questions