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

Mortgage that has an interest rate that changes based on some event. For example, the interest rate may vary depending on changes in the prime rate or inflation rate. ...

The definition of a testator in real estate is an individual who makes or leaves a valid will detailing how their possessions are to be divided or distributed among their heirs. The ...

Secondary is something that is less important than or compared to something else. Secondary can also be a result of something or someone that is primary by definition. A secondary location ...

A flexible price that may be adjusted. A resolved situation between two or people or parties through discussions in which common interests are modified. For example, real estate ...

Wondering what a Judgment Lien is?Well, a Lien can be consensual or non-consensual, right? Meaning it can be forced or agreed upon by way of a bilateral contract. When we say ...

Aerial photos are photographs taken by cameras mounted in aircraft or satellites. Aerial photos are more commonly used in the industrial Real Estate Market to get a better feel of a ...

The total expenditures required to make a locality suitable for the designated purpose. An example is how much it would cost to build a shopping center on a lot. ...

Loss of property from nonfulfillment of some duty or condition. In some cases, forfeiture is required by a court order, whereas in other cases the nonfulfillment of a contractual debt is ...

Property boundary demarcated by the curb. ...

Popular Real Estate Questions