When determining market value, what type of condition is most often assumed?

When determining market value, the assumption is generally made under normal conditions. Market value represents the estimated price that a property would sell for in an open market under typical conditions, where both the buyer and seller are fully informed and motivated, and willing to transact without undue pressure. This scenario reflects a balance of supply and demand, where the market is functioning efficiently, allowing for a competitive and fair negotiation process.

In contrast, distressed circumstances or fire sale prices indicate conditions that are not representative of normal market transactions. These situations often involve urgency that skews the value, leading to lower sale prices than what would be expected under normal circumstances. Similarly, a seller's market, where demand exceeds supply leading to potentially inflated prices, deviates from the standard assumptions used in market value assessments. Normal conditions provide a baseline framework for appraisers and real estate professionals to measure value accurately, making this the correct choice in the context of market valuation.