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Market Value

Market value is the major focus of most real property appraisal assignments. Both economic and legal definitions of market value have been developed and refined. A current economic definition agreed upon by agencies that regulate federal financial institutions in the United States is: The most probable price (in terms of money) which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing title from seller to buyer under conditions whereby: 1) The buyer and seller are typically motivated; 2) Both parties are well informed or well advised, and acting in what they consider to be their best interests; 3) A reasonable time is allowed for exposure in the open market; 4) Payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; 5) The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.