Property Valuation
What is 'market value' as defined in appraisal standards and Nevada practice?
AThe price a seller needs to pay off their mortgage
BThe most probable price a property would sell for in an arm's length transaction between a knowledgeable, willing seller and buyer, with neither under compulsion to act, given adequate market exposure✓ Correct
CThe average of the three appraisal approach values
DThe assessed value as determined by the Nevada county assessor
Explanation
Market value (as defined by USPAP and most lenders) is the most probable price in a competitive, open market under all conditions requisite to a fair sale, with buyer and seller each acting prudently, knowledgeably, and without undue stimulus. Key elements: arm's length transaction, adequate exposure time, neither party under compulsion. Market value differs from market price (actual sale price), investment value (value to a specific investor), and assessed value (for tax purposes).
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