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Market value is the price at which an asset would trade in a competitive auction setting. Market value is often used interchangeably with open market value, fair value or fair market value, although these terms have distinct definitions in different standards, and may differ in some circumstances.
International Valuation Standards defines market value as "the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion."
Market value is a concept distinct from market price, which is “the price at which one can transact”, while market value is “the true underlying value” according to theoretical standards. The concept is most commonly invoked in inefficient markets or disequilibrium situations where prevailing market prices are not reflective of true underlying market value. For market price to equal market value, the market must be informationally efficient and rational expectations must prevail.
Recently, Mocciaro Li Destri, Picone & Minà (2012) have underscored the subtle but important difference between the firms’ capacity to create value through correct operational choices and valid strategies, on the one hand, and the epiphenomenal manifestation of variations in stockholder value on the financial markets (notably on stock markets). In this perspective, they suggest to implement new methodologies able to bring strategy back into financial performance measures.
Market value is also distinct from fair value in that fair value depends on the parties involved, while market value does not. For example, IVS currently notes fair value "requires the assessment of the price that is fair between two specific parties taking into account the respective advantages or disadvantages that each will gain from the transaction. Although market value may meet these criteria, this is not necessarily always the case. Fair value is frequently used when undertaking due diligence in corporate transactions, where particular synergies between the two parties may mean that the price that is fair between them is higher than the price that might be obtainable in the wider market. In other words "special value" may be generated. market value requires this element of "special value" to be disregarded, but it forms part of the assessment of fair value.
Readers should realize that Market Value is not exact science, but an introduced concept from individuals and companies as a business tool. Value is subject to seller and buyer's perception and interpretation of parameters that they decide to take into consideration, while other people usually refer to their very own perceptions and interpretations of what those people think is important. Any whatever article should be explained in this context, because people pay what they want in spite of whatever advice.
Local, regional, national, international? Considering that Market Price is what people agree to pay for something at a given moment at a given place, it is important to underline the importance of the time and place range wherein sellers and buyers meet. The Local and Instant Market Value of a specific item is exactly the same as the Local Market Price. And if several people want the same thing while there is not enough for everybody that wants it, Market Value and Market Price are identical. It is wrong to state that things have any stand-alone value, because value depends upon transactions.When it comes to electric equipment the best source is The Orion Blue Book or Usedprice. No transaction means zero value, whatever value estimation or selling price expectation. When a lot of popular items in a place is almost sold out, sometimes people are willing to pay more than the asking price rather than spend time and effort to get it cheaper elsewhere. Is the paid price then Market Value or Market Price? Both.
These two words are used to say that a price is too high or too low in regard to the expectations of an individual or a group. It is a matter or comparison to personal expectations or/and some comparison tool as a chart, table, formula that is agreed upon and set forth as a common viewpoint by those people. Overpricing and Underpricing statements are valid if related to the used comparison origin but irrational without such a basis. More often than not, these statements are purely emotional without any valid reference.
The term is commonly used in real estate appraisal, since real estate markets are generally considered both informationally and transactionally inefficient. Also, real estate markets are subject to prolonged periods of disequilibrium, such as in contamination situations or other market disruptions.
Appraisals are usually performed under some set of assumptions about transactional markets, and those assumptions are captured in the definition of value used for the appraisal. Commonly, the definition set forth for U.S. federally regulated lending institutions is used, although other definitions may also be used under some circumstances:
USA, Licensed or Certified Apppraisers may be required under state, federal, or local laws to develop appraisals subject to USPAP Uniform Standards of Professional Appraisal Practice. The Uniform Standards of Professional Appraisal Practice requires that when market value is the applicable definition, the appraisal must also contain an analysis of the highest and best use as well as an estimation of exposure time. Many states do not require mandatory licensure of appraisers.
It is important to note that USPAP does not require that all real estate appraisals be performed at market value. Indeed, there are frequent situations when appraisers are called upon to appraise other values. If a value other than market value is appropriate, USPAP only requires that the appraiser provide both the definition of value being used and the citation for that definition.
Market value is the most commonly used definition of value in real estate appraisal in the United States because it is required for all federally regulated mortgage transactions and because the International Association of Assessing Officers (IAAO) has accepted it for use in property taxation. However, real estate appraisers use many other definitions of value in other situations.
Liquidation value is the most probable price that a specified interest in real property is likely to bring under all of the following conditions:
This value definition differs from the previous one in that it assumes an orderly transition, and not "extreme compulsion".
For land acquisitions by or funded by U.S. federal agencies, a slightly different definition applies:
When a real estate appraiser works with a business valuation appraiser (and perhaps an equipment and machinery appraiser) to provide a value of the combination of a business and the real estate used for that business, the specific market value is called "going concern value." It recognizes that the combined market value may be different from the sum of the separate values: "The market value of all the tangible and intangible assets of an established operating business with an indefinite life, as if sold in aggregate."
Use value takes into account a specific use for the subject property and does not attempt to ascertain the highest and best use of the real estate. For example, the appraisal may focus on the contributory value of the real estate to a business enterprise.
Some property tax jurisdictions allow agricultural use appraisals for farmland. Also, current IRS estate tax regulations allow land under an interim agricultural use to be valued according to its current use regardless of development potential.
The case of Luxmoore-May and Another v. Messenger May Baverstock  1 W.L.R. 1009 shows us the legal interpretation of market value: "The measure of damage in this case is, I conclude, the difference between what the foxhounds in fact realised consequent on the defendants' breach of contract and what was their true open market value at that time. What better guide could there be to that value than the price at which these paintings happened to be knocked down at Sotheby's so shortly afterwards? The price which the international art market was willing to pay was surely prima facie the best evidence of the foxhounds' value." Also the equilibrium of the qualibrium is hard to distinguish between.