How is "market value" defined in real estate terms?

Market value in real estate is defined as the price a property would likely sell for on the open market, under normal conditions. This definition takes into account various factors that influence real estate transactions, such as supply and demand, property conditions, and comparable sales in the area. It reflects the consensus of what buyers are willing to pay and sellers are willing to accept in a competitive market, facilitating fair negotiations.

Other options may incorporate elements related to property value, but they do not quite align with the generally accepted definition of market value. For instance, the idea of the highest price a seller can demand does not consider the actual dynamics of the market or the willingness of buyers to pay. Similarly, the assessed value given by local authorities is often related to property taxes and may not accurately reflect the current market conditions. Lastly, valuing a property based solely on the original purchase price disregards any changes in the market or the property's condition over time. These aspects highlight why the chosen answer effectively encapsulates the concept of market value in real estate.