This is from the 12th Edition of the Appraisal of Real Estate
published by the Appraisal Institute. Hope it helps a little.
The term price represents the amount a particular purchaser agrees to
pay and a particular seller agrees to accept under the circumstances
surrounding their transaction. A price, once finalized, refers to a
sale or transaction price and implies an exchange; a price is an
accomplished fact.
Generally the circumstances of a transaction reflect conditions within
one or several markets. A market is a set of arrangements in which
buyers and sellers are brought together through the price mechanism. A
market may be defined in terms of geography, products or product
features, the number of available buyers and sellers, or some other
arrangement of circumstances.
A real estate market is created by the interaction of individuals who
exchange real property rights for other assets such as money. Specific
real estate markets are defined on the basis of various attributes:
? Property type
? Location
? Income-producing potential
? Typical investor characteristics
? Typical tenant characteristics
? Other attributes recognized by those participating in the exchange
of real property
Real estate-related expenditures are directly linked to the price of
goods and services in competitive markets. For example, the costs of
roofing materials, masonry, architectural plans, and rented
scaffolding are determined by the interaction of supply and demand in
specific areas. Thus, they are subject to the influence of social,
economic, governmental, and environmental forces. |
