“Market Value means the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition are the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:
1. Buyer and seller are typically motivated;
2. Both parties are well informed or well advised, and acting in what they consider their own best interest;
3. A reasonable time is allowed for exposure in the open market;
4. Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and
5. The price represents the normal consideration for the property sold unaffected by special or creative financing or sale concessions granted by someone associated with the sale.”
USPAP – Uniform Standards of Professional Appraisal Practice
Investment value is the value of an investment to a particular investor based on his or her investment requirements. An investment value is the value to an individual, not necessarily value in the market place.
Highest and Best Use
The reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value.
The most probable price that a specified interest in real property should bring under consummation of a sale within a short time period.
Insurable value is based on the replacement and/or reproduction cost of physical items that are subject to loss from hazards. Insurable value is the portion of the value of an asset or asset group that is acknowledged or recognized under the provisions of an applicable loss insurance policy. This value is often controlled by state law and varies from state to state.
Going-concern value is the value of a proven property operation. It includes the incremental value associated with the business concern, which is distinct from the value of the real estate. Going-concern value includes an intangible enhancement of the value of the operating business enterprise, which is produced by the assemblage of the land, buildings, labor, equipment, and the marketing operating. The assemblage creates an economically viable business that is expect to continue. Going-concern value refers to the total value of a property, including both real and intangible personal property attributed to business value.
The power to take private property for public use by a state, municipality, or private person or corporation authorized to exercise functions of public character, following the payment of just compensation to the owner of that property.
Historical appraisals (retrospective appraisals) are performed when a situation requires an appraisal of property to determine Market Value where the effective date of the appraisal is a date in the past. Retrospective appraisals maybe required for inheritance tax, insurance claims, income tax, lawsuits, and other purposes.
Appraisals as of a future date (prospective appraisals) may be required to estimate the value of property interests in proposed developments or the value at the end of a cash flow projection.
Source: Appraisal Institute. The Dictionary of Real Estate Appraisal. 5th ed. Chicago, IL: Appraisal Institute, 2010. Print.