What basic calculation is used to find the market value of a property in a competitive market?

To find the market value of a property in a competitive market, the concept of "value in exchange" is critical. This term refers to the price at which a property would change hands between a willing buyer and a willing seller, both acting in their own best interests and having reasonable knowledge of the relevant facts.

In a competitive market, this exchange value reflects several factors, including location, property condition, and current market conditions. It emphasizes the idea that the market value is ultimately determined by what buyers are willing to pay for a property, rather than just its physical characteristics or replacement costs. The focus on transactional value underscores the necessary interaction and negotiation between market participants, distinguishing it from other approaches that may not reflect current market dynamics.

This concept aligns with the principle that value is derived not only from the inherent qualities of the property but also from the behaviors and preferences of the individuals in the market. Thus, it is the most relevant calculation for assessing the market value in a competitive environment.