Market Value / Value Definition

Most real property appraisal assignments are completed on single-family residential homes with a market value definition included within them, which is required by the Uniform Standards of Professional Appraisal Practice (USPAP) in all reports, that conforms to the definitions suggested by federal government agencies like; the Federal Housing Administration (FHA), the Veterans Administration (VA), Fannie Mae (FNMA), Freddie Mac (FRE), the FDIC or (as noted below) Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA") defined market value as:

"The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus.  Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

            1.     Buyer and seller are typically motivated;

            2.     Both parties are well informed or well advised and each is acting in what he considers his own best interest;

            3.     A reasonable time is allowed for exposure in the open market;

            4.     Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and

            5.     The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale."

                   (Federal Register, Vol. 55, No. 165, August 22, 1990, Rules and Regulations, 12 CFR 323.2, p. 34696.)

These "standard" market value definitions are not the only ones that can be used in an appraisal assignment.  At times

clients request appraisals for other purposes and value opinions are expressed based on alternate definitions including;

insurable value, going-concern value, liquidation value, assessed value, use value and investment value.

Contact us with your questions or concerns regarding market value definitions or regarding your specific appraisal assignment in Nevada at 1-702-568-6699.  We can also be e-mailed at grigdon@cox.net.  

Commercial Real Estate Appraisals in the Las Vegas & Henderson, Nevada Area.