How is "market value" defined in real estate?

Market value in real estate is best understood as the estimated selling price of a property under normal market conditions. This definition encompasses the idea that market value reflects a fair and realistic appraisal based on various factors such as current market trends, the condition of the property, and comparable sales in the area. It is not simply the price a buyer is willing to pay or the seller's lowest price; instead, it is a balance of both buyer and seller motivations in a competitive marketplace.

In normal market conditions, the market value indicates what a property could potentially sell for if both parties are acting in their own interests and are well-informed. This definition also accounts for any external economic factors, zoning, and the local real estate climate which can influence buyer and seller behavior. Thus, market value serves as a reliable gauge for appraisers, investors, and real estate professionals when evaluating properties.