California Real Estate Practice Exam

Market price is:

1. price actually paid for property (escrow closed)

2. price asked for by an informed seller

3. price offered by an informed purchaser

4. what a property would bring in the open market

The correct answer is: price actually paid for property (escrow closed)

Market price refers specifically to the price that is actually paid for a property once the transaction is completed and the escrow has closed. This price is determined by the agreement between the buyer and seller in the context of the prevailing market conditions at the time of the sale. It reflects the real value of the property as established through the transactional process, including negotiations and any concessions made by either party. The other options represent different concepts related to market value or pricing strategies. For instance, the price asked by an informed seller indicates their expectations or pricing strategy but does not account for what someone is actually willing to pay. Similarly, the price offered by an informed purchaser may indicate their willingness to buy but does not represent the final agreed-upon figure once negotiations are concluded. Lastly, discussing what a property would bring in an open market relates to theoretical market conditions and potential prices rather than the conclusive transaction price established when the sale is finalized.