The definition of Market Value we use includes an implicit HC

[J Grant]

The "sale" mentioned in the definition of "Market Value." Is considered to be a hypothetical sale -- OF COURSE.

The above is correct.

In post 20 with the Gmeran translation got off track about t will sell for. The original post # 1 was disjointed, in my opinion.

The effective date can be present, past, or future. That is apart from a past sale date when a subject actually sold, and it is not after a prediction of what it will sell for. It is an HC/"assumed" sale ( that is not a real sale ) , and that holds true whether the effective date we specify is past, present, or future.

I will give examples in a next post. The definition of MV, however, statess out a set of terms and conditions and buyer/seller movitioans. Disposition MV and liquidation MV have a set of different terms and conditions and motivations. The HC "sale " is what the property "should " ( in the appraisal ) bring as of X effective date according to which definition of MV was used.

DEFINITION OF MARKET VALUE: 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, knowledgeably and assuming
the price is not affected by undue stimulus. Implicit in this definition is 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 each acting in what he or she considers his or her 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 sales concessions* granted by anyone associated with the sale.

 

[J Grant]

Example A)—The property address is 32 Cherry St. The same definition of market value is used, but there are different effective dates.

Example A)
April 15, 2024 is the current effective date of an appraisal for 32 Cherry St. The opinion of market value is $500,000 as of 04/15/2024.
The client also wants a retrospective market opinion, as of Dec 1, 2021. The opinion of market value is $425,000 as of 12/01/2021.
The client also wants a future/prospective MV opinion as of March 1, 2026. The opinion of market value is $600,000, as of 03/01/2026.

Example B) property address, 32 Cherry St. Different definitions of market value are used, but the effective date stays the same.

Example B). April 15 , 2024 is the effective date of an appraisal for 32 Cherry St. The opinion of MARKET VALUE is $500,000 as of 04/15/2024.
The client wants an additional opinion of disposition value for April 15, 2024. The opinion of DISPOSITOIN VALUE is $460,000 as of 04/15/2024.
The client wants an additional opinion on the liquidation value for April 15, 2024. The opinion of LIQUIDATION VALUE is 390,000 as of 04/15/2024.

 

[sputnam]

I think you meant to write a market value, but parket value works for a garage appraisal!

USPAP & Advisory References•: APPRAISAL: (noun) the act or process of developing an opinion of value; an opinion of value.•

What you state is true; an individual price may represent MV to that buyer and seller, but it is not an opinion of MV in appraisal. And that price may or may not have been arrived at with MV terms of sale

A problem arises when appraisers take the stand-alone term "market value" ( the definition of market value) and treat it as the same thing as an opinion of market value. They are not one and the same. An MV definition states the terms of sale and the motivation of parties for that type of value. The opinion of market value is the appraisal, which uses the definition of MV to filter the HC/assumed "sale" of the subject as well as to vet the sale terms of the comps.

Yep... I am not known for being a good typist. I changed it.