Appraisal Basics
Understanding Market Value
By Carlos E. Larocca, Certified Residential Appraiser (Cert Res RD6469)4 min read
Market value is the most probable price a property should bring in a competitive and open market, with buyer and seller each acting knowledgeably and without undue pressure. It differs from assessed value, list price, insured value, and what any individual buyer might pay.
The definition, unpacked
Market value assumes a reasonable exposure time, typical financing, informed parties, and no duress. A sale between family members, a rushed relocation, or a foreclosure often fails those conditions and therefore is not evidence of market value.
How market value differs from other values
Each of these numbers answers a different question, which is why they rarely match.
- Assessed value — the county's mass-appraisal figure for taxation
- List price — the seller's asking number, not a conclusion
- Insured value — replacement cost of improvements, excluding land
- Investment value — worth to one specific buyer, not the market
Highest and best use
Market value reflects the property's highest and best use: the legally permissible, physically possible, financially feasible, and maximally productive use. On an acre lot in Pinecrest, that use may be redevelopment rather than the existing house.
Frequently asked questions
- Why is my assessed value different from my appraised value?
- County assessments use mass-appraisal models applied across thousands of properties and are often capped by Save Our Homes. An appraisal analyzes your specific property against verified sales.
- What is my home worth?
- Online estimates rely on public records and cannot see condition, renovations, view, or condo line. An appraisal establishes value from verified comparable sales and an actual inspection.