What Does The Definition Of "Market Value" Say?
DEFINITION OF MARKET VALUE (this definition is of only one of several)
…The definition of “market value” in its strictest sense is 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 are 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 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;
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.
RE: Market Value, which is usually the standard, implies a ‘knowledgeable, meaningful, competitive’ market. Last time I checked, buyers and sellers were not “well informed” leading up to the economic ‘mess.’ That would pretty much throw those prior values in the irrelevant basket??
If a buyer and a seller is not “well informed,” their self interest can be influenced or maybe skewed; resulting in a social loss. Market Value must be meaningful and there must be a “well informed” buyer and seller, thus acting in their own self interest.
Disclosure: all definitions of market value suggests a knowledgeable or, well informed, buyer and seller.
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Posted by admin
on Jun 19 2010. Filed under Blog, Uncategorized.
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