What does "market value" refer to in context of property?

"Market value" refers specifically to the price that a willing buyer and a willing seller agree upon in an open and competitive market. This reflects the actual amount that a buyer is prepared to pay for a property and the seller is ready to accept. It is determined by various factors, including the property's condition, location, and current market trends.

This definition distinguishes market value from other concepts such as appraised value, which is a professional assessment of worth often based on similar property sales and other considerations. Insurance replacement value focuses on the cost necessary to replace the property with a similar one, disregarding market conditions. Potential future value involves speculation about the property’s worth over time, which is not a reflection of its current price in the marketplace. In summary, the concept of market value is inherently tied to the actual transactions that occur between buyers and sellers, making it the most accurate choice in this context.