What is meant by market value in real estate?

Market value in real estate refers to the estimated price at which a property would change hands in a competitive and open market, where both buyer and seller are acting willingly and under no undue pressure. This definition emphasizes the principle of fair conditions and realistic expectations based on current market conditions.

When determining market value, various factors are considered, including comparable property sales, current demand and supply dynamics, and overall economic conditions affecting real estate prices. Therefore, the concept is grounded in actual market activity rather than arbitrary figures set by property owners or assessed values for taxation.

This context serves to differentiate market value from the other options provided. The price set by the property owner may not reflect what buyers are willing to pay, especially if it's above the prevailing market conditions. The tax assessment value often serves a different purpose and may not account for current market trends or actual selling prices. Lastly, while a real estate agent can provide a professional opinion on pricing, that opinion may vary and does not necessarily equate to what the true market value is at a given time. Thus, the option that identifies market value as the estimated price for a competitive market sale is the most accurate and reflective of the economic principles governing real estate transactions.