What defines the term "market value"?

Market value is defined as the most probable price a property would sell for in a competitive and open market, where both buyers and sellers are acting with reasonable knowledge and without undue pressure. This definition emphasizes the conditions under which the property is sold—specifically, that it occurs without coercion, both parties are well-informed, and it reflects the property’s true worth in the current economic climate.

In this context, the focus on "most probable price" acknowledges that market dynamics—such as demand, supply, and overall economic circumstances—play a crucial role in determining this value. This is distinct from the highest price a seller might list a property for, as that figure could be influenced by many factors, including seller sentiment, rather than a true measure of market conditions.

Market value also differs significantly from the lowest price a buyer is willing to pay because such a figure does not account for what the property is realistically worth based on market factors. Similarly, assessed value—which is the value determined by a government agency for taxation purposes—can vary dramatically from actual market value due to factors like local tax policies or property improvements that may not be recognized by the assessor.

Thus, recognizing market value as the probable selling price in a competitive market encapsulates the essential