What is the primary distinction between market value and assessed value?

The primary distinction between market value and assessed value lies in their definitions and the purposes they serve in real estate transactions. Market value refers to the amount a willing buyer would pay for a property in an open and competitive market, taking into account various factors like location, condition, and market demand. It reflects current buyer sentiment and the true economic value of the property as perceived by buyers.

Assessed value, on the other hand, is determined by local government assessors for the purpose of taxation. It often does not reflect the current market conditions but is rather a percentage of the market value that is used to calculate property taxes. Assessed value can be influenced by different criteria and may not always align with what a buyer is willing to pay in the market.

Option B accurately captures the essence of market value as it emphasizes the buyer's willingness to pay, which is a fundamental aspect of determining how properties are valued in real estate transactions. Understanding this distinction is crucial for appraisers, property owners, and buyers alike, as it influences investment decisions and tax assessments.