Which of the following best defines "market value" in real estate?

Market value in real estate is best defined as the estimated price at which a property would sell in a competitive and open market. This definition encapsulates the concept that market value is not just a historical figure or a subjective perception; rather, it reflects a well-informed consensus among buyers and sellers about the worth of a property based on current conditions.

In a competitive and open market, multiple buyers and sellers interact, influencing prices through their actions. Factors such as supply and demand, market trends, and the condition of the property are all taken into account, making this definition comprehensive and aligned with the fundamental principles of real estate valuation.

Additionally, this notion differentiates market value from other forms of value such as transactional prices or appraised values for lending. While the last sold price and the highest price a seller is willing to accept may reflect individual circumstances, they do not convey the broader market's assessment of property value as effectively as the concept of market value does. Furthermore, the value determined by appraisers often serves specific purposes, such as securing loans, which may not always align with current market conditions. Thus, the chosen definition emphasizes a realistic and collective understanding of property value in a dynamic market context.