How is a property's market value established?

A property's market value is established through appraisal, market analysis, and sales comparisons. This multifaceted approach provides a well-rounded understanding of what a property should be worth based on current market conditions.

An appraisal is a professional assessment performed by a licensed appraiser who evaluates a property based on various factors such as its condition, location, and comparable properties (often referred to as "comps") in the area. Market analysis involves looking at recent sales data to see what similar properties have sold for, which provides insight into the demand and pricing trends within the neighborhood. Sales comparisons further refine this information by directly comparing the property to recently sold properties that are similar in size, features, and location.

Together, these methods provide a more accurate and objective estimate of a property's true market value, taking into account more than just subjective opinions or temporary market dynamics. This is why this choice correctly represents how market value is established.