What Is Market Value in Real Estate?

The market value of a property is the most probable price a home would sell for in an open and competitive real estate market. It reflects what buyers are willing to pay and sellers are willing to accept under normal conditions.

How Market Value Works

Market value represents a home's true worth based on current market conditions. Unlike appraised value, which is determined by a licensed appraiser, market value is shaped by buyer demand, local trends, and comparable sales.

  • Based on what a typical buyer would reasonably pay
  • Influenced by location, condition, upgrades, and recent sales
  • Often estimated using a Comparative Market Analysis (CMA)
  • May differ from appraised, assessed, or fair market value

Example of Market Value

A home is listed for $500,000. Three similar homes nearby recently sold for between $480,000 and $510,000, and buyer demand is strong.

Based on these trends, local agents estimate the property’s market value to be around $495,000–$505,000, even before an appraisal takes place.

Why Market Value Matters

  • Helps sellers set a realistic listing price
  • Guides buyers in making competitive offers
  • Influences appraisals and mortgage approvals
  • Determines equity, pricing strategies, and negotiating power

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