Property Valuation
In Florida real estate, 'market value' is best defined as:
AThe price the owner paid for the property
BThe most probable price a property would bring in an arm's-length transaction in a competitive market✓ Correct
CThe assessed value as determined by the county property appraiser
DThe replacement cost of the improvements minus depreciation
Explanation
Market value is the most probable price a property would sell for in a competitive, open market between a willing buyer and willing seller, both acting prudently and knowledgeably, in an arm's-length transaction.
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Key Terms to Know
Depreciation
A reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Math Concepts
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