In the context of real estate, what is "market value"?

Market value is defined as the price a property would sell for in an open market under normal conditions. This definition encapsulates a scenario where buyers and sellers are acting in their own best interests, with full knowledge of the relevant facts, and the property is exposed to the market for a reasonable period. In this context, market value reflects a fair assessment of the property's worth based on what similar properties have sold for and the current demand within the real estate market.

Understanding market value is crucial for both buyers and sellers, as it helps to inform pricing strategies, negotiations, and investment decisions. It offers an estimate that takes into account many factors, including location, property condition, market trends, and economic conditions.

The other choices do not fully encompass the concept of market value. The assessed value is primarily used for taxation purposes and does not represent the open market price. The amount a buyer is willing to pay may reflect personal circumstance or emotional value, which is subjective and may differ from the market's broader perception. Finally, the cost of construction plus land value represents the replacement cost of a property rather than its current market value, which can vary significantly based on demand and other external market conditions.