What is defined as the exchange of money for property that establishes market value?

The correct term for the exchange of money for property that establishes market value is defined as "Market value." This concept refers specifically to the price that a property would sell for on the open market under normal conditions, where both the buyer and seller are willing participants and have reasonable knowledge of relevant information.

Market value is determined through various economic factors, including supply and demand, comparable property sales, and the conditions prevailing at the time of sale. It reflects the most probable price that the property would bring in an arm's length transaction.

While "Value in Use" refers to the value of a property based on its specific use to an owner, and "Discounted Cash Flow" is a financial analysis method used to estimate the value of an investment based on its expected future cash flows, neither of these captures the essence of the exchange that determines market value.

"Value in Exchange" is a term that closely relates to market value, as it suggests the value recognized in a transaction where goods or services are exchanged. However, market value is the more precise term that directly correlates to the price in a competitive real estate transaction. Understanding these distinctions helps clarify how property values are assessed in real estate appraisals.