What is "market value" according to appraisal principles?

Market value is defined as the most probable price that a property should sell for under competitive and open market conditions. This definition considers various factors such as supply and demand, the condition of the property, and the motivations of buyers and sellers. It reflects a consensus price that would be agreed upon by a willing buyer and a willing seller, both fully informed and not under any undue pressure to complete the sale.

This concept is crucial in the appraisal process because it provides an objective basis for determining property value. It acknowledges that actual sale prices can vary widely, but market value aims to represent a realistic estimate of what a buyer would pay in a typical transaction in the current economic environment.

The other options do not align accurately with the appraisal definition of market value. For example, stating it as the highest price someone is willing to pay can imply a subjective bias and does not consider broader market conditions. Similarly, identifying market value as the average selling price of similar properties overlooks the nuances of individual property characteristics and local market dynamics. Lastly, defining it as intrinsic value based on historical data disregards current market conditions and buyer-seller behaviors.