Illinois Broker Reciprocity Practice Exam 2025 – Complete Study Resource

Market value in real estate is defined as the estimated price a property would sell for on the open market, reflecting the conditions and dynamics of supply and demand within the real estate market. This definition is based on the assumption that both the buyer and seller are acting in their own best interests, are reasonably knowledgeable about the market, and are under no undue pressure to complete the transaction.

This concept recognizes that market value can fluctuate based on various factors, including neighborhood trends, property condition, and current economic conditions. It provides a realistic view of what a property could command in a competitive marketplace, rather than just what a buyer and seller might agree upon in a specific transaction, which could be influenced by negotiation tactics or emotional elements.

The other options do not accurately capture the essence of market value. The price agreed upon between the seller and buyer can indeed differ from market value, particularly if unique circumstances affect their decision-making. The amount financed by a lender is often based on appraisal processes but does not reflect the true market dynamics. Similarly, the assessed value set by local authorities is focused on taxation purposes and may not align with current market conditions.