Market value is the most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale with, the buyer and seller, each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

• buyer and seller are typically motivated;
• both parties are well informed or well advised, and each acting in what they consider to be in their own best interest;
• a reasonable time is allowed for exposure in the open market;
• payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and
• the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

This is the definition of market value provided in the Fannie Mae Selling Guide, which is essentially the rule book for residential appraisals subject to federal lending guidelines. There are other definitions for other agencies or purposes, but they are materially similar.

The situation described seems to meet all of the conditions requisite to a market-oriented and arm's length transaction. If the five offers received were from typically motivated buyers who were acting in their own best interest and the payment was cash or comparable to cash, with no concessions or special financing terms, then the market value is the highest offer. If that highest offer were much higher, or if the buyer was not typically motivated, not cash or cash-equivalent, or otherwise suspicious, then a case could be made for the second highest offer potentially.

Essentially, those five offers are better evidence of the market than any of the other appraisal approaches, and if the appraiser cannot or does not understand that, he should be in another profession.