In real estate terms, what does "market value" signify?

Market value in real estate refers to the most probable price that a property would sell for in a competitive and open market, where both buyers and sellers are acting rationally and without undue pressure. This concept captures a property's worth based on current market conditions and comparable properties, reflecting what buyers are typically willing to pay and what sellers are usually willing to accept. It assumes a scenario where negotiations are fair, and the property has had adequate exposure to the market.

Other definitions often confuse market value with related but distinct ideas, such as the anticipated future value of a property, which looks at projections rather than current conditions. Similarly, the highest price a buyer is willing to pay or the minimum price a seller is willing to accept reflects individual perspectives and conditions rather than a broad market consensus. Market value is established through a combination of market demand, property features, and comparable sales in the area, making it a foundational concept for buyers, sellers, and real estate professionals.