Which term describes the perception of value held by buyers and sellers?

• A. Subjective Value
• B. Objective Value
• C. Market Value
• D. Recovery Value

Answer: (A)

Value in real estate is shaped by how each person sees the property, influenced by their needs, preferences, and personal circumstances. This is why the worth of a property can feel different to different buyers and sellers at the same time. That individual perception is what "subjective value" captures—the idea that value is not fixed or purely objective, but is experienced differently by different people.

Understanding this helps explain why market prices vary and why negotiations can lead to a range of offers. In contrast, objective value would be value determined by facts or costs independent of personal feelings, market value refers to the price a willing buyer and seller would agree on in an open market (an average or representative market outcome, not a single person’s perception), and recovery value is a term used in insurance to describe value after a loss, which isn’t about how buyers or sellers perceive worth.