Certified Residential Appraiser Practice Exam

What term refers to the present worth of future benefits as anticipated by market participants?

1. Market Value

2. Intrinsic Value

3. Appraised Value

4. Investment Value

The correct answer is: Market Value

The term that refers to the present worth of future benefits as anticipated by market participants is "Market Value." This concept encapsulates the amount for which a property would sell in a competitive and open market under normal conditions. It is determined by what buyers are willing to pay and what sellers are willing to accept, reflecting the collective expectations of future benefits associated with the property, such as income generation or appreciation. Market Value is grounded in the principles of supply and demand and is influenced by various factors, including location, condition, and overall economic conditions. It represents a consensus view of value among market participants, making it a critical concept in real estate appraisal. In contrast, Intrinsic Value refers to the perceived or calculated value of an asset that is rooted in its fundamental qualities, rather than market sentiment. Appraised Value is often determined by an appraiser based on specific methodologies and is not always synonymous with Market Value. Investment Value pertains to the value of an asset to a particular investor, based on their individual investment criteria and expectations, which may differ from the broader market perspective.