What Is the Market Value of a Residential Property?

The market value of a residential property is the main factor considered when a home is sold, financed and taxed. Real estate professionals are often required to conduct careful analysis to estimate the market value of a home.

The Facts

Market value is defined as the price that any reasonable and ready buyer will be willing to pay for a residential property.

Function

The market value is used by homeowners to determine how much to list the home for, county assessors to calculate annual property tax charges and by financial institutions for financing purposes.

Considerations

Several things will cause the market value of a property to rise or fall including the home's condition, location, size and market conditions of the area.

Comparative Market Analysis

Real estate salespersons perform a Comparative Market Analysis (CMA) in order to estimate the market value of a home. A CMA compares the listing, selling price and pending sales prices of similar homes in the area.

Comparable Sales Analysis

Appraisers compare the sales prices of at least three other sold properties in the area in order to estimate the market value of a home. Their estimated market value takes into account the differences in size, condition and style of the homes.

References

• Office of Real Property Services: How Estimates of Market Value are Determined for Residential Properties
• realestateabc:An Appraisal to Determine Your Home's Price?