What is "market value" in real estate?

Market value in real estate refers to the estimated price at which a property would sell on the open market, assuming both the buyer and seller are acting in their best interests and are reasonably knowledgeable about the property and the market conditions. This concept is crucial because it reflects the actual price that buyers are willing to pay and sellers are willing to accept under normal conditions, unlike personal motivations or tax considerations.

Factors that contribute to determining market value include comparable sales in the area, current market trends, the property's condition, and location. The market value is a dynamic figure that can change based on fluctuations in supply and demand as well as economic conditions.

In contrast, the other options refer to different concepts. The amount a seller hopes to receive for a property may not accurately reflect true market conditions, as it is influenced by the seller's personal expectations. The tax assessed value is often used for taxation purposes and may not align with current market conditions, while the price determined by a real estate agent's opinion is subjective and could vary widely from one agent to another. Thus, market value is distinct in that it is based on objective market conditions rather than personal or assessed values.