The economic definition of market value is defined by the Appraisal Institute as:
“The most probable price that the specified property interest should sell for in a competitive market after a reasonable exposure time, as of a specified date, in cash, or in terms equivalent to cash, under all conditions requisite to a fair sale, with the buyer and seller each acting prudently, knowledgeably, for self-interest, and assuming that neither is under duress.”
In Ontario, Section 14(1) of the Expropriations Act defines market value as:
“the amount that the land might be expected to realize if sold in the open market by a willing seller to a willing buyer.”
Similarly, the International Valuation Standards Council defines fair value/open market value as
“The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.”
Depending on whether the client is a bank, an insurance company, a relocation service (Brookfield GRS, for example), a buyer or a seller, appraisal values may differ greatly. In some areas, the assessed value for taxes lines up closely with market value, but this is certainly not true of Kingston. Appraisals for corporate clients are most often based on replacement cost or income stream.
What does your Realtor® say?
The value that is most relevant to you is the one that is based on comparable sales in your market segment. Your Realty Difference Realtor® will recommend a price based on recent sales, adjusted for market factors. Considerations may include:
- Maybe larger families are moving into your neighbourhood. That makes homes with three plus bedrooms and large yards more appealing.
- Perhaps a large employer is opening a plant nearby, which will increase demand for housing in general.
- How are interest rates affecting people’s willingness to take out big mortgages?
Using the extensive background information available through a real estate Board’s MLS® System, your agent can compare your home to a collection of similar homes that have recently been sold in your area. No two homes are the exact same, but we are very good at adjusting calculations according to the differences.