In appraisal terms, what is meant by market value?

Market value refers to the price that a property is expected to sell for in a competitive and open market. This definition encompasses the concept that the market value is determined by the willing buyer and a willing seller, both with reasonable knowledge of the relevant facts and neither acting under duress. It reflects what the property would achieve in terms of sales price if put up for sale in an unrestricted market.

Other concepts, such as assessed value or the value determined by an insurance company, are not considered market value because they may not accurately reflect current sales conditions or might be based on different criteria, like tax assessments or replacement costs. Projected future value takes into account potential growth and changes over time, which is distinct from the market value defined at a specific point in time based on current conditions. Thus, market value is primarily concerned with the immediate sale potential in the current market environment.