Valuation and Analysis, 14% of the examination
Market value
The most probable price a property should bring in a competitive and open market, with buyer and seller each acting prudently and neither under duress.
Market value assumes informed parties acting without undue pressure after reasonable market exposure. Cost is what was spent to create the property, and price is the amount actually paid. A distressed sale or unusually motivated buyer may produce a price that does not indicate market value. That does not automatically make the transaction an example of value in use, which concerns usefulness to a particular user.
See also
Test the distinction
A relevant question from Valuation and Analysis, selected because its facts or explanation use this concept.
A buyer pays $50,000 above every comparable sale because the house adjoins their parents' home. Which type of value does that price reflect?
Written to DRE's published topic list. Not a real examination question, since reproducing those is a misdemeanor under B&P Code section 123.
Primary sources
Use these authorities when a course summary, forum answer, or older flashcard conflicts with the current California rule.