How is “market value” generally defined?

Market value is defined as the most probable price a property would sell for in a competitive market, where both buyer and seller are acting knowledgeably and willingly. This definition encompasses several key elements: it reflects real economic conditions and establishes a baseline for what can be expected in a fair transaction.

In a competitive market, various factors such as supply and demand, economic conditions, and property characteristics influence this probable price. This definition ensures that the price considers the perspectives and behaviors of both buyers and sellers without undue influence from external pressures.

Other definitions listed do not capture the essence of market value accurately. For example, the assessed value by local authorities is often used for taxation purposes and may not reflect the actual market conditions. Similarly, the average price of similar properties might provide a general idea but doesn't account for the specifics of a property or the dynamics of negotiation that affect its sale. Lastly, the highest price a seller might accept does not represent a market transaction unless it aligns with what a buyer is willing to pay in a competitive environment. Hence, choice B precisely encapsulates the concept of market value in real estate.