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
A lien that makes property security for the repayment of debt. Mortgages can finance the acquisition of real estate such as a home. A mortgage has certain benefits compared to other debt ...
A tenancy in which no written lease is involved, rent being paid monthly. It can be renewed for each succeeding month or terminated at the option of either party with sufficient notice. ...
To approximate the worth or valuation of property To give an appraisal value estimate of property. Property value appraisals are never exact, and are at best approximations of actual ...
A lessee (tenant) subleases the apartment to a third party .The tenant is now sandwiched between the lessor and the sublessee. In other words, the tenant is acting as a lessee to the ...
Investigation into the causes of death. A post mortem is normally performed by a public coroner. It might be performed to determine the cause of death of an apartment house tenant. ...
Combination of insurance policies on property with each providing an additional increment of coverage exceeding the limits of the preceding policy. For example, policy A adds $70,000, then ...
Another residence in addition to the main residence where a person or family resides. An example is a second home out of the city used on weekends and during vacations. Interest and real ...
A capitalization method which divides a properties first year net operating income by an estimated general capitalization rate to develop a total property estimate. ...
The definition of population density is a way to measure the number of populations in a specific area. The method of calculating population density is by the number of people per square ...
Have a question or comment?
We're here to help.