Determining the market value of a property involves assessing the price most people would pay for it in its current condition. To establish the fair market value, the assessor considers factors such as the selling prices of similar properties, replacement costs, operational and maintenance expenses, potential rental income, and various other elements influencing its worth. Additionally, the assessor examines factors like the current interest rates for borrowing money to buy or build on similar properties in the area.
Continuous analysis of sales and trends is essential, and these findings are applied to specific neighborhoods. Fair market value, more precisely, is defined as "the most probable price in terms of money in a competitive and open market, assuming that the buyer and seller are acting prudently and knowledgeably, allowing sufficient time for the sale, and assuming that the transaction is not affected by undue pressures."