The Real Estate Market Value is the most probable value at which a property should be brought into a competitive and open market under all conditions necessary for a fair sale. The buyer and the seller, each acting prudently and assuming the price is not affected by undue circumstances .
Inexplicit of this is the completion of a sale on a specific date and the passing of the property from seller to buyer under conditions in which:
• Buyer and seller are strongly motivated.
• Both parties are informed about the Market value at the fullest and both parties are acting in the way that would give them highest profit.
• A reasonable time is alloted for the exposure of the property in the open market.
• The payments should be made by cash or by other means equal to it.
• The Real Estate Market Value represents the normal consideration for the property sold untouched by special or creative financing accorded by anyone attached with the sale.
To know the Real Estate Market Value better one needs to know the difference between price and market value. Market value is an ever changing fluid concept whereas price is payment that is made at time of transaction of the property. It is often seen that the market value is compromised at the time of the transaction.
The reasons can be:
• Family relationship between the buyer and the seller
• The transaction is a part of a larger transaction.
Market value depends on some conditions:
• Location of the property: This is very important in determining the Real Estate Market Value as the same house will have different values in different locations. For example, a house in Mississauga, Canada will be less valued than the same house in Toronto as it is a big city and a commercial sector also. The Real Estate Market Value also increases when the property provides good transportation means.
• Current Condition of the property: This factor is also important as an old wretched property would be valued less than a new well equipped property.
• Financial Availability: Easy installment schemes, lower interest in banks for housing loans and other such encouraging financial terms and conditions play a big part in increasing the Real Estate Market Value of a particular property.
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