What does the term "market value" refer to in appraisal?

Market value is defined as the most probable price that a property would bring in a competitive and open market under all conditions requisite to a fair sale. This concept reflects the price that a willing buyer would pay to a willing seller, both of whom are knowledgeable about the property and its market.

This understanding emphasizes the importance of competitive conditions in determining market value. It acknowledges that numerous factors, such as the current economic environment, demand and supply dynamics, and the property’s characteristics, can influence pricing.

While the other options may involve pricing aspects, they do not capture the full scope of market value as defined in appraisal. The total cost of constructing a property pertains more to replacement or reproduction cost rather than market dynamics. The price a property would sell for in a foreclosure reflects a distressed sale situation, which often differs significantly from market value due to external pressures. The estimated sale price of a property based on past sales data may provide some insights, but it does not encompass the current market conditions and is not necessarily reflective of the most probable price in a competitive environment.