What is the definition of market value?

Market value is defined as the price a property would fetch under normal conditions. This definition reflects the theoretical price that a willing buyer would pay to a willing seller in an open and competitive market, without any undue pressures or incentives influencing the transaction. This understanding is fundamental in real estate appraisal, as it serves as a benchmark for evaluating property values within a specific market.

Normal conditions imply that both parties are acting rationally and have access to all necessary information, leading to a transparent transaction process. The consideration of factors such as market trends, property condition, and location all come into play in determining this value. Thus, option B accurately encapsulates the essence of market value as it pertains to real estate transactions.

In contrast, the other options provided do not align with the standard definition of market value. The assessed value set by local government is derived for tax purposes and may not reflect actual market conditions. The highest price a seller can ask for a property represents a subjective expectation rather than an objective market assessment, while the average price of similar properties does not account for individual property variations and specific market dynamics that influence true market value.