Global Definitions Database

The amount at which that asset (or liability) could be bought (or incurred) or sold (or settled) in a current transaction between willing parties, that is, other than in a forced or liquidation sale. The appraisal profession further expands this definition as follows: The most probable price which a specified interest in real property is likely to bring under all of the following conditions:

▪ Consummation of a sale occurs as of a specified date.
▪ An open and competitive market exists for the property interest appraised.
▪ The buyer and seller are each acting prudently and knowledgeably.
▪ The price is not affected by undue stimulus.
▪ The buyer and seller are typically motivated.
▪ Both parties are acting in what they consider their best interest.
▪ Marketing efforts were adequate and a reasonable time was allowed for exposure in the open market.
▪ Payment was made in cash in U.S. dollars or in terms of financial arrangements comparable thereto.
▪ The price represents the normal consideration for the property sold, unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

This definition can also be modified to provide for valuation with specified financing terms.