Texas Crammer Practice Exam

What is the term for the estimated probable price of a property at the appraisal date?

1. Replacement cost

2. Appraised value

3. Market value

4. Assessed value

The correct answer is: Market value

The term for the estimated probable price of a property at the appraisal date is "Market value." This concept refers specifically to the price that a willing buyer would pay and a willing seller would accept for a property in an open and competitive market, assuming neither party is under any undue pressure to complete the transaction. Market value is typically influenced by various factors, including comparable sales in the area, the condition of the property, and prevailing economic conditions. It represents a fair assessment of what the property is worth at the time of appraisal, making it essential for purposes such as sales, financing, and taxation. The other terms, while related to property valuation, have different meanings. For example, replacement cost refers to the cost to replace a property with a similar one at current prices, which does not necessarily reflect market conditions. Appraised value often refers to the value determined by an appraiser using various methods, but it may not equal market value due to appraisal methodologies. Assessed value is typically used for tax purposes and may vary from the market value based on local government regulations or assessment practices.