What best describes market value?

Market value refers to the estimated amount that a property would sell for in a competitive and open market. It is an assessment of the property’s worth based on current market conditions, comparable sales, and potential buyers' willingness to pay. This value is often determined through an appraisal process, where various factors such as location, property condition, and local market trends are considered.

The key aspect of market value is that it reflects the price that a knowledgeable buyer and a willing seller would agree upon in an arm's length transaction, assuming both parties act in their best interests while being informed of relevant information about the property.

In contrast, other options describe different value concepts. For instance, the cost to replace the property refers to replacement cost, while the owner’s belief about the property’s worth can be highly subjective and does not necessarily reflect actual market conditions. Additionally, basing value on the original purchase price does not account for changes in the market or property depreciation or appreciation over time. Thus, the essence of market value is its foundation in potential selling price rather than personal opinions or historical costs.