What does the term 'market value' refer to?

The term 'market value' refers to the price agreed upon for a property when both the buyer and seller are acting in their own interests and are not under any undue pressure to complete the transaction. This definition emphasizes that market value is assessed in an open market where both parties have a fair opportunity to negotiate without coercion, ensuring that the sale reflects the true worth of the property based on current market conditions.

Understanding 'market value' in this context is essential as it separates it from concepts like assessed value, which may be determined by tax authorities and not necessarily reflect what a willing buyer would pay in an open transaction. Additionally, factors such as list price and value under pressure can distort the true market value, as these do not consider the genuine agreement reached without external influence.