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

Individual who will receive an inheritance upon the death of another. The proceeds of an insurance policy may be in a lump sum annuity. Real estate also passes to the beneficiary. ...

The seller disclosure is a statement made in good faith regarding the condition of the home he/she is trying to sell. There is a seller disclosure form – called “Form 17” ...

Insurance or maintenance policy taken out by a buyer of real or personal property. ...

A lien is a legal instrument by which one party – usually lenders and creditors - guarantees the obligation of a real estate owner to do something – generally repays the money. ...

Expenditures incurred building a structure, including material and labor. ...

Index of the costs to construct residential properties. ...

Generation X, also known as Gen X , is the generational extract of Americans that are sandwiched between the Baby Boomer Generation and the Millennial generation (also called ...

Income derived from a collection of asset investments. Real property investments produce rental and lease payment income. Investments in mortgages and other long term debt instruments ...

Legal dictate that must exist for property to be owned as joint tenants. ...

Popular Real Estate Questions