Market Value
Market value is the price a property would fetch in a competitive, open market. Discover how appraisals and comparables determine market value.
Definition
Market value represents the most probable price a property would sell for in a competitive and open market, under conditions where both buyer and seller act prudently, knowledgeably, and without undue pressure. Appraisers estimate market value by analyzing recent comparable sales, current market conditions, property characteristics, and economic factors. Market value is distinct from assessed value (used for taxes) and market price (the actual sale price, which may reflect motivation or other circumstances). Understanding market value helps sellers price property realistically and buyers make informed offers.
Why It Matters
Every number attached to your home is a different number. The county assessment, an online estimate, what your neighbor got last spring and what an appraiser certifies next month rarely agree, and only one of them has to survive a lender's review. Overshooting by 5 percent usually costs more in stale days on market than the price you were reaching for.
Examples
Listing at $1.19 million on the strength of one 2024 sale down the block produces no offers. Three closed comps from the past 90 days support $1.09 million, and the Kirkland house sells in week nine at $1.075 million.
An appraiser adjusts one comp down $18,000 for a fourth bedroom and another up $9,000 for a finished basement, landing at $612,000 against a $625,000 contract price.
Two identical floor plans in the same Renton plat close six weeks apart at $701,000 and $655,000. The gap is a west-facing greenbelt lot versus one backing onto Highway 167.
Tips
Build your comp set from closed sales in the last 90 days, within about a mile, in the same school attendance area. Pending and active listings describe your competition, not your value.
Leave the county assessed value out of pricing entirely. Washington assessments lag the market by a year or more and exist to divide up the tax burden, not to predict a sale price.
When you land within about 1 percent of a round search threshold, price below it. A home worth $503,000 gets seen by far more buyers at $499,950, because searches on NWMLS feeds cluster at $500,000.
Related Terms
Appraisal
Appraisals estimate property market value. Learn how licensed appraisers evaluate comparables, condi...
Assessed Value
The assessed value is used to calculate property taxes. Discover how tax assessors determine assesse...
Broker’s Price Opinion (BPO)
A broker’s price opinion (BPO) is a quick property value estimate. See how BPOs use comparables and ...
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