What does "market value" represent in property appraisals?

Market value represents the estimated price that a property would sell for in a competitive and open market, where buyers and sellers act based on knowledge and without undue pressure. This definition is fundamental to property appraisals, as it reflects the most probable price a property would bring if offered on the market today.

Market value is derived from various factors, including comparable sales (comps), current market trends, and the condition of the property. It implies a willing buyer and a willing seller, both of whom are reasonably informed about the property and the market conditions. This understanding is crucial for appraisers as they evaluate properties and determine fair values for various purposes, such as buying, selling, financing, or taxation.

Other options refer to different concepts that do not align with this standard definition of market value. For instance, the lowest selling price relates more to distress sales rather than fair market transactions. The assessed value is primarily tied to property tax calculations and can differ significantly from market value. Lastly, the highest potential value based on features does not account for market conditions and the actual demand for the property, which can lead to an inflated perception of value. Hence, the correct answer encapsulates the core aspect of property analysis within a competitive landscape.