Which of the following best describes the term 'market value'?

The term 'market value' refers to the price a property is likely to sell for in a competitive market, and this answer captures the essence of how properties are valued based on current market conditions. Market value is determined by the interaction of supply and demand and reflects what a buyer would be willing to pay and what a seller would be willing to accept in an open market scenario, without any pressures or constraints.

This definition is important because it highlights that market value is not static; it is influenced by various factors such as location, property condition, and current economic conditions. The competitive environment allows for adjustments in pricing based on comparable sales and market trends, making this description the most accurate.

In contrast, the other options do not fully encapsulate the concept of market value. The highest price a seller can expect might not consider competitive dynamics, the initial asking price set by the seller may not reflect what buyers are willing to pay, and the average price of similar properties sold lacks the specifics of competitive market conditions that drive value. Thus, understanding market value in the context of a competitive market is crucial for making informed real estate decisions.