What defines market value in property appraisal?

Market value in property appraisal is defined as the most probable price a property can bring on the open market, assuming a competitive and open market with eager and informed buyers and sellers. This definition emphasizes the concept of an arms-length transaction where both parties are motivated, knowledgeable, and acting without undue pressure.

This valuation considers various factors such as location, property condition, recent market trends, and comparable sales, allowing for a realistic assessment of a property's worth. It reflects the price that a seller can expect to receive if the property is listed in a normal market environment, where supply and demand conditions play a critical role.

The other choices do not accurately represent market value. For instance, stating the lowest price at which a property could sell does not take into account the potential for a higher transaction value, nor does it reflect a genuine market scenario. Similarly, the notion that the price at which a sale must happen implies coercion or urgency, which distorts the concept of a fair market exchange. Lastly, relying on the average price of recent sales in the area overlooks the unique factors contributing to each property’s value and may not provide an accurate indication of a property’s actual market value.