Price is the amount agreed by particular parties in a particular transaction. Financing terms, urgency, relationships or negotiating circumstances may influence it.
Market value is a professional estimate at a specified valuation date, reflecting a willing buyer and seller in an arm's length transaction after appropriate marketing, acting knowledgeably, prudently and without compulsion. It is not the factual price of a single transaction.
| Term | Meaning |
|---|---|
| Asking price | The amount requested by an owner or marketer; it may change through negotiation. |
| Transaction price | The amount agreed in a specific transaction, potentially influenced by its individual conditions. |
| Market value | An estimated value based on the appropriate valuation basis, scope and market evidence at the valuation date. |
An example
An owner may sell below market value to obtain cash quickly, or a buyer may pay more because a particular location has special value to them. The agreed price can therefore differ from the independent market value opinion.
A single listing or transaction is not sufficient evidence for another property's value. This distinction matters for financing, accounting and disputes, where market value is used when it is the appropriate basis.
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