What do we call the price at which two willing parties agree on a property?

The price at which two willing parties agree on a property is referred to as market value. This term specifically denotes the price that a property would likely sell for in a competitive and open market, assuming both the buyer and seller are reasonably informed and acting in their own interests. It reflects the most probable price that the property will bring, taking into account factors such as location, condition, and current market conditions.

In contrast, valuation typically refers to an estimate of a property’s worth, which may not necessarily align with what a buyer is willing to pay or what a seller is willing to accept. Insured value pertains to the amount for which a property is insured, a figure that may include construction costs or replacement cost rather than the market dynamics. Lastly, value in use considers the specific usefulness of the property to the owner rather than the prevailing market conditions, and may not reflect what the property would sell for in a competitive environment. Thus, market value is the most accurate term for the price at which an agreement is reached between parties.