Definition of Market Value

What does the term "market value" mean? What is the definition of the term "market value"?

The "market value" is the value at which an asset could currently be bought or sold. The market value isn't what you think the asset is worth - instead, it's what the market determines the asset is worth. What could you buy or sell an asset for in today's market? That's the current market value.

Definition of Market Value - Financial DictionaryLet's say that you buy a home for $500,000. Three years go by, and the real estate market sags in your area.

You get multiple appraisals done on your property to determine the current value. The three appraisals all come in at $355,000, but you are stubborn in your belief that your home could still fetch $500,000 on the open market.

You decide to list your home for $500,000, but nobody puts an offer in. Finally, after dropping your listing price all the way down to $350,000, you eventually unload the home.

The "market value" of the home was $350,000, as that was the price that you could sell the asset for.

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