When reference is made to the value of a property, generally fair market value is meant. Market price is what one might get from the sale of the property in terms of money. Sometimes value and price are the same, most particularly when there is no compulsion to buy or sell. Under other circumstances, there might be a wide difference between the market value of a property and the actual sale price. The appraiser must be careful to consider normal buyers and sellers attitudes for the type of property appraised. The appraiser is estimating actual market value not theoretical value.
The immobility of real estate makes it unique. Theoretically, there are no two parcels exactly alike and therefore no means of making a total comparison between properties. Circumstances of one buyer and one seller affect the sale price of a specific property, whereas the actions of many buyers and sellers of similar type properties determine the going rate for the sale or exchange of property on the open market.
Among the various types of value that have been designated from time to time are book value, tax value, market value, cash value, capital value, speculative value, par value, true value, exchange value, reproduction value, physical value, replacement value, insurance value, investment value, rental value, face value, depreciated value, leasehold value, sound value, sales value and cost value.
The real estate broker should be concerned mostly with the concept of Fair Market Value, or simply market value, for this is the basis upon which most property is generally bought and sold.