Property ValuationIntermediateDelaware Exam

What is 'market value' as defined in appraisal practice?

AThe price a seller needs to net after commissions and closing costs
BThe most probable price a property would bring in an arm's-length transaction on the open marketCorrect
CThe assessed value set by the county tax assessor
DThe appraised value determined by the lender's software

Why The most probable price a property would bring in an arm's-length transaction on the open market Is Correct

Answer B: The most probable price a property would bring in an arm's-length transaction on the open market

Market value is the most probable price a property would sell for in a competitive and open market under all conditions requisite to a fair sale, where buyer and seller are knowledgeable, acting prudently and in their own interest.

Exam Tip: Property Valuation

Valuation questions focus on the three approaches to value: sales comparison, cost, and income. Know which approach is best for which property type. The income approach uses cap rate and NOI — memorize these formulas.

Key Property Valuation Terms in This Question

Appraisal

A professional estimate of a property's market value prepared by a licensed or certified appraiser.

Closing Costs

Fees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.

Related Delaware Property Valuation Questions

Practice More Delaware Real Estate Questions

1,500+ questions covering all exam topics. Start free — no signup required.

Take the Free Delaware Quiz →