What is considered when determining a building's market value?

The concept of market value is fundamentally about the price that a property will sell for in a competitive market, which is determined by the agreement between a willing buyer and a willing seller. This transaction reflects both parties' perceptions of value, accounting for current market conditions, property condition, location, and any unique features of the property. This understanding is key in the valuation process as it encompasses more than just physical attributes.

In contrast, while the final sale price of similar homes in the area also provides valuable comparative data for determining market value, it may not reflect unique characteristics of the subject property or current market conditions that could affect its value. Similarly, focusing solely on the size of the lot or the original construction cost does not capture the dynamic nature of the real estate market, where many variables influence what a buyer is willing to pay at a given time. Thus, considering the agreed-upon price between buyer and seller best encapsulates the essence of market value.