What is defined as the amount actually paid for a property?

The amount actually paid for a property is referred to as the market price. This term is used in real estate to denote the final sale price agreed upon by the buyer and seller in a transaction. Unlike appraised value, which is an estimate of a property's worth based on various factors and conducted by a certified appraiser, or estimated value, which may refer to a general opinion of value without being tied to a specific transaction, market price reflects the actual financial exchange that takes place.

Replacement cost refers specifically to the cost of replacing a property with a similar one, utilizing modern materials and standards, which is more focused on construction and improvement rather than the selling price in a market context. Therefore, the market price is an essential concept in understanding real estate transactions, as it encompasses the real-life dynamics of negotiation, market conditions, and buyer-seller agreements.