Market Value of the fee simple interest is the most common value sought in an appraisal. Market value and value in exchange are synonyms. Market value of the leased fee, leasehold, life estate, etc. are less common but certainly possible. Most appraisals are for the purpose of estimating the market value of the fee simple interest of real property.
According to USPAP market value is:
The most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus.
Implicit in this definition of market value is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:
|•||The buyer and seller are typically motivated.|
|•||Both parties are well informed or well advised.|
|•||Both parties are acting in their own best interest.|
|•||A reasonable time is allowed for exposure on the open market.|
|•||Payment is made in terms of U. S dollars cash.|
|•||The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale|
If the sales price includes special or creative financing or sales concessions granted by anyone associated with the sale, the transaction may not represent market value.