Market value
National Real Estate Exam glossary · Valuation
Definition
The most probable price a property should bring in a competitive and open market under conditions requisite to a fair sale: a willing and informed buyer and seller, neither under duress, with reasonable exposure time. It is distinguished from price (what was actually paid) and cost (the dollars spent to create the property).
Market value in plain English
Market value is the price a property would *most likely* sell for in a fair, open sale — both the buyer and seller are willing, informed, and not being pressured or rushed, and the home has had a normal amount of time on the market. It's the honest 'what it's really worth' number, and it's deliberately different from two things people confuse it with: 'price' is what someone actually paid (maybe they overpaid or got a steal), and 'cost' is the money spent to build it. Like a used car with a fair Blue Book value — a desperate seller might dump it cheap, but that low sale doesn't change what it was truly worth.
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