Texas Property Tax Consultant Practice Exam

What is included in the definition of market value?

1. The buyer must continue the current use of the property

2. There must be a reasonable exposure time with no duress

3. The property should be clear of encumbrances

4. The property must have been inspected by a certified inspector

The correct answer is: There must be a reasonable exposure time with no duress

Market value is fundamentally defined as the most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale. This definition emphasizes several key elements, with the aspect of reasonable exposure time and the absence of duress being particularly significant. When there is a reasonable exposure time, it implies that the property has been available for sale long enough that potential buyers had an opportunity to consider the purchase. This aspect ensures that the sale price reflects true market conditions, as it allows for a fair assessment of market demand without pressure or coercion affecting the buyer's decision. Additionally, the scenario of no duress means that neither the buyer nor the seller should be under any external pressures that may distort the true value of the property. A sale under distress would likely result in a price lower than the property's actual market value, which would not accurately reflect its worth in a stable market environment. In contrast, the other choices introduce criteria that are not essential components of determining market value. The requirement for the buyer to continue the current use of the property is not a defining factor in establishing its market value; market value can sometimes account for different uses. Also, while clear title and inspection can influence a buyer's willingness to purchase, these factors