Market value is the price a property would likely command in an open market under typical conditions.
Market value is the price a property would likely command in an open market under typical conditions.
Market value matters because mortgage lending depends on a realistic view of what the property is worth in the market, not just what one specific buyer hopes to pay.
It also matters because borrowers may hear many different value figures during a transaction. Market value is the broad concept behind those discussions, but the actual number used by a lender may be expressed through the appraisal process and appraised value.
Borrowers encounter the idea of market value when comparing asking prices, reading appraisals, or trying to understand why a lender is questioning the contract price.
The concept becomes practical during appraisal review because the lender is effectively asking whether the property’s supported market value aligns with the loan structure.
A seller lists a home at one price, a buyer agrees to another, and the appraisal concludes a lower supported number. The debate is really about what the property’s market value appears to be under current conditions.
Market value differs from Appraised Value because market value is the broad valuation concept, while appraised value is the appraiser’s concluded figure in a specific report.
It also differs from Assessed Value, which is an administrative tax number rather than a lender-focused market judgment.