What is the difference between 'market value' and 'appraised value'?

Market value and appraised value serve distinct purposes in the real estate sector. Market value refers to the estimated price that a property would sell for under normal market conditions, reflecting what buyers are willing to pay in an open and competitive market. It is influenced by factors such as demand, location, condition of the property, and comparable sales.

On the other hand, appraised value is specifically determined by a qualified appraiser who evaluates a property based on various criteria, including the physical characteristics of the property, recent sales of comparable properties, and current market conditions. The appraisal is used to provide an objective opinion of value, often for purposes like mortgage lending or property tax assessments.

The option that states market value reflects potential selling price while appraised value is determined by a professional appraiser accurately captures this difference. The market value is a broad estimate of what the property could likely sell for, while the appraised value is a calculated figure arrived at through a professional assessment. This distinction is crucial for buyers, sellers, and lenders in making informed decisions regarding properties.