Business, Legal & Accounting Glossary
The price that a home will get on the market, based on comparisons to similar homes that have sold recently in the area.
n. the price which a seller of property would receive in an open market by negotiation, as distinguished from a “distress” price on a forced or foreclosure sale, or from an auction. Market value of real property is normally determined by a professional appraiser who makes comparisons to similar property sales in the area, which are often called “comparables.
Market value of any good refers to the amount of money that the product can fetch its seller. In simpler terms, market value can be explained as the amount that any seller expects to get for merchandising any product or service or securities in the open market. Market value can be referred to as the existing quoted price at which investors purchase or vend a share or a bond at a specified time.
Market value and market price are two distinct concepts that are sometimes overlapped. Market price can be referred to as the price at which traction takes place and market value refers to the fundamental value that is obtained due to the transaction. The discrimination between market value and market price arises in ineffective markets or disequilibrium market situations. In these types of market situations, the market prices that prevail do not reflect the actual market value. Market value and market price can be equivalent if the market is exceptionally efficient and there prevail rational expectations.
Fair Market Value (FMV) is regarded as the common base for evaluating damages of any property, according to which money is paid for the loss. The loss is paid in a claim which is predetermined in a contract of insurance. Fair market value is referred to as the price of the property which is sold between knowledgeable, discrete, and agreeable parties and both of them are rational in their behaviour.
Fair market value is an estimate of what a participating, willing buyer is ready to pay to a willing buyer for a property in a free market. When such a transaction takes place, the actual transaction price is the fair market value. Market transactions are always not possible for privately handled assets and for such cases FMV has to be estimated. Estimation of FMV is subjected to several other factors like the place, time, circumstances and principles of each participating person.
There are certain conditions that are to be fulfilled while estimating Liquidation value of any property. The sale of the property whose liquidation value is to be determined must take place between limited future marketing periods, which is declared by the customer.
Using the internet, anyone can determine the market value of their home before deciding what price to put on it.
The real estate agent informed her that the market value of her home has doubled since she purchased it.
Fair market value
Market value is the current value of an asset usually determined by recent prices on an exchange.
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This glossary post was last updated: 28th November, 2021 | 0 Views.