Illinois exam glossary
Market price
A house is listed at $500,000, goes under contract at $510,000 and closes after a price amendment at $505,000. The seller receives less after the stated costs and mortgage payoff. Those numbers can all be correct. Each describes a different part of the transaction.
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The short answer
In the basic real estate exam distinction used here, market price is the amount actually paid in a particular transaction. It can differ from an opinion of market value. An asking price is a proposal, an accepted contract price precedes closing, and seller proceeds are the amount remaining after applicable deductions. Label the number and transaction stage before comparing or calculating it.
Reviewed October 26, 2026. PSI’s National Valuation domain has eight scored national broker questions, not eight specifically on market price. This page uses the common price-paid teaching definition and explains an alternative technical usage below. Examples use hypothetical prices and stated assumptions; they are not current property quotations, appraisals, loan approvals or tax-filing instructions.
Name the number, then decide what it can show
- Identify the stage. List price is what the seller asks. Offer price is proposed. Contract price is the amount in the valid agreement, including any effective amendment. A pending contract is not a completed sale. For a closed transaction, verify the final consideration and terms rather than copy a superseded listing or contract figure.
- Identify what was transferred. A fee, partial interest, leasehold and package of real estate plus movable assets are different things. Verify the rights and any supported personal-property allocation. The same dollar amount does not mean the buyer acquired the same property interest or economic package.
- Separate price from value. One transaction supplies evidence; it does not automatically establish market value. The applicable definition and effective date matter. The cited federal definition concerns the most probable price under specified competitive-market conditions, including knowledgeable, typically motivated parties and normal consideration.
- Separate the seller’s ledger from appraisal analysis. An actual seller credit can reduce proceeds by its stated amount in a simplified ledger. The effect of that concession on a comparable sale’s indicated value is a different question requiring market evidence. A cost, credit, price reduction and market-supported adjustment are not interchangeable.
- Check the evidence before relying on a sale. Relevant facts include party relationships, motivation, exposure, financing, condition, rights, included assets and concessions. A related-party or distressed label alone does not establish how much weight the transaction deserves. Fannie Mae’s cited guidance addresses its appraisal program; it is not a universal protocol for every valuation.
- Calculate only what the question asks. A seller net, buyer contribution toward price, remaining cash to close, lender LTV base, reported transfer figure and market statistic each have a different purpose. State which costs, deposits, credits and program rules are included. A lower appraisal does not by itself rewrite the purchase agreement.
| Number | What it describes | What it does not prove alone |
|---|---|---|
| List price | The current asking amount | A completed transaction |
| Offer price | A buyer’s proposed price with terms | Acceptance or closing |
| Contract price | The agreed amount under the current valid contract | The final completed transaction |
| Sale price | Consideration in the completed transaction | Market value under every definition |
| Seller proceeds | Sale amount after specified seller deductions | The property’s appraised value |
| Appraised value | The reported value opinion and effective date | An automatic change to contract price |
| PTAX-203 figure | The number reported under the form’s instructions | An independent market-value determination |
| Median sale price | The sample’s middle value or average of its two middle values | Appreciation of every property |
The distinctions that matter
| Distinction | How it works | What to notice |
|---|---|---|
| Market price and market value | Here, market price means a particular transaction’s price paid. Market value is an opinion under an identified definition and date. | A transaction fact can differ from the value opinion. |
| Asking, offer and contract prices | One is requested, one proposed and one agreed under the valid contract. | Do not turn an unaccepted proposal into a contract. |
| Contract and completed sale | A contract can be amended or fail to close. A closed sale has its actual final terms. | Check status and amendments. |
| Gross sale price and seller proceeds | The sale amount precedes the seller’s applicable credits, payoffs and charges. | A mortgage payoff reduces proceeds, not the contract price itself. |
| Seller credit and appraisal adjustment | The settlement credit is a stated transaction amount. A comparable adjustment reflects supported market reaction. | Do not import a ledger subtraction as an automatic appraisal rule. |
| Price reduction and separate credit | A reduction changes the agreed price. A separate credit can leave that price unchanged while changing the parties’ ledger. | Read how the agreement actually structures the adjustment. |
| Appraisal gap and buyer price contribution | The gap is price above the accepted appraised value. The buyer’s total contribution toward price can also include the base equity contribution. | The gap alone is not necessarily all the buyer needs. |
| Price contribution and remaining cash to close | A deposit already credited toward price reduces what remains to fund. Other costs and credits can change the final closing amount. | Count an existing deposit once. |
| Market statistic and individual property change | A mean or median describes its sample. Different sales mixes can change it without every property appreciating. | Know the sample, segment and period. |
Work through the facts
Follow the price through closing
A property is listed at $500,000, goes under contract at $510,000 and closes after a valid price amendment at $505,000. No other change affects the final price.
- The listing was the asking amount.
- The original agreement used $510,000; the effective amendment changed it.
Answer: Use $505,000 as the stipulated final sale price. Seller proceeds require a separate calculation.
The higher headline offer leaves less before other costs
Offer A is $510,000 with a $20,000 seller credit. Offer B is $500,000 with no credit. Assume identical other seller costs and risks and that the stated credit is fully applied.
- A leaves $490,000 before the other seller deductions.
- B leaves $500,000 on the same limited comparison.
Answer: B leaves $10,000 more before the identical remaining costs. This is a seller-ledger comparison, not an appraisal adjustment.
A price amendment is already in the price
The parties reduce a $425,000 contract by $10,000 and close at $415,000. There is no separate $10,000 closing credit.
- The effective price reduction has already produced the $415,000 figure.
- Subtracting another $10,000 would count the same reduction twice.
Answer: The final stipulated price is $415,000; do not turn it into $405,000 by repeating the adjustment.
Separate a supported package allocation
A $780,000 package includes real estate, boats and movable furniture. For this teaching problem, a verified supported allocation assigns $55,000 to the personal property.
- The question expressly supplies an allocation, rather than the original cost of the items.
- $780,000 − $55,000 = $725,000 before any other adjustment.
Answer: The allocated realty component is $725,000. That arithmetic alone is not a complete appraisal.
A credit’s face amount is not the market adjustment
A comparable closes at $500,000 with a $10,000 seller incentive. The stated credible market evidence supports a $4,000 downward adjustment for that incentive. Ignore other adjustments.
- Use the expressly supported market effect for this comparison.
- $500,000 − $4,000 = $496,000; the $10,000 face amount answers a different question.
Answer: The stipulated incentive-adjusted comparable indication is $496,000, not an automatic $490,000.
Appraisal gap plus base contribution
A hypothetical eligible purchase has a $520,000 price and accepted $500,000 appraisal. Its stipulated loan rule caps the loan at 80% of the lower figure. No other issue changes the base; ignore closing costs and deposits.
- The stated base is $500,000.
- 80% × $500,000 = $400,000.
- $520,000 − $400,000 = $120,000 toward price.
Answer: The buyer’s price contribution is $120,000: $100,000 of base equity plus the $20,000 gap. This is not a loan-approval prediction.
Gross price is not the seller’s available proceeds
A sale price is $480,000. The hypothetical seller has a $280,000 dated payoff, $8,000 credit and $17,000 in other specified seller charges. Those charges contain no duplication.
- Total specified deductions are $305,000.
- Subtract them from the $480,000 sale amount.
Answer: The simplified proceeds are $175,000 before any item the question expressly excludes. They are not the seller’s taxable gain.
Odd and even samples have different median steps
Prices in thousands are 200, 250, 300, 350 and 900. A separate four-sale sample is 200, 250, 300 and 900.
- The five-sale median is its middle value, 300; the mean is 2,000 ÷ 5 = 400.
- The four-sale median is (250 + 300) ÷ 2 = 275; its mean is 1,650 ÷ 4 = 412.5.
Answer: The medians are $300,000 and $275,000; the means are $400,000 and $412,500. Neither sample statistic is an appraisal of every home.
The market mix can change the median
A town’s reported median rises from $350,000 to $430,000 as the mix shifts toward luxury sales. The facts separately state that matched property evidence is flat.
- The reported median rose by $80,000.
- That is about 22.9% relative to $350,000, but it summarizes different sale samples.
Answer: The median change does not establish 22.9% appreciation for each home or contradict the stated flat matched-property evidence.
A reporting instruction does not amend the contract
Assume PTAX-203 reporting is required, $400,000.01 is the correct unrounded Line 11 amount under its instructions, and no adjustment changes that amount.
- The current Step 2 instructions round Lines 11 through 18 to the next highest whole dollar.
- The reporting figure becomes $400,001; it does not change the parties’ contract by itself.
Answer: Report the stipulated amount using the form’s rounding rule. Do not infer a new contract price or market-value opinion from that reporting convention.
Apply the repair-credit reporting instruction
For this simplified PTAX-203 problem, the stated amount is $400,000 before a $5,000 credit against price specifically for repairs. The credit qualifies under the current Line 11 instruction. There is no other consideration, exchange, assumed mortgage, personal property or reporting adjustment.
- Line 11 excludes the qualifying credit against price or refund for improvements or repairs.
- $400,000 − $5,000 = $395,000 before applying the form’s remaining relevant instructions.
Answer: The stipulated Line 11 amount is $395,000. This specific reporting treatment is not an automatic appraisal adjustment or a rule subtracting every kind of closing credit.
Mistakes to avoid
- Treating a pending contract as a closed sale. Verify transaction stage and final terms.
- Treating every use of the word price as the same number. Asking, offer, contract, sale and net figures answer different questions.
- Equating every price paid with market value. Apply the identified value definition, effective date and verified evidence.
- Subtracting the same price reduction twice. Distinguish an amended price from a separate closing credit.
- Subtracting every incentive’s face amount as an appraisal adjustment. Analyze the supported market effect; do not assume it is zero or nonzero.
- Assuming every related or distressed sale is unusable. Investigate the actual terms, motivation, exposure and market relevance.
- Using personal property’s purchase cost as an automatic allocation. A supported allocation or adjustment requires appropriate evidence.
- Calling a seller’s gross-to-net calculation taxable gain. Debt payoff, proceeds and tax basis have different roles.
- Calling the appraisal gap all required buyer funds. Include the stated loan base, total price contribution and any remaining costs or credited deposit.
- Calling an even sample’s median one particular middle sale. Average its two middle values after ordering the data.
- Calling a higher median universal appreciation. Check the sample mix and matched-market evidence.
- Treating reported tax consideration as a complete appraisal. Apply the form’s own instructions and verify the transaction for the different intended use.
Check your understanding
These are original teaching questions, not recalled or predicted PSI questions. Answer first, then explain why the other choices fail.
1. Under the basic teaching definition used on this page, what is market price?
- The asking price whether or not anyone accepts it
- The appraiser’s opinion in every case
- An automatic property-tax value
- The price actually paid in the particular transaction
Show answer and explanation
Answer: D. The price actually paid in the particular transaction
The page states its price-paid usage. It differs from asking, proposed or agreed prices before closing and from an opinion of market value.
2. A home is listed at $500,000 and has not sold. What does the list figure establish?
- The lender’s accepted appraised value
- The seller’s net proceeds
- The completed sale price
- The current asking amount
Show answer and explanation
Answer: D. The current asking amount
A listing supplies an asking price and market evidence of that status, not proof that the proposed amount was paid.
3. A buyer proposes $510,000, but the offer is not accepted. What is that number?
- An accepted contract price automatically
- An amendment to the seller’s mortgage payoff
- An offer price
- A completed market transaction
Show answer and explanation
Answer: C. An offer price
The proposal is not acceptance or closing. The actual facts must establish a valid agreement before calling it the contract price.
4. A $425,000 contract is validly reduced to $415,000, and the sale closes at that amount with no separate $10,000 credit. What is the stipulated final price?
- $405,000 after subtracting the same reduction again
- $10,000 as the whole price
- $425,000 because the first contract always controls
- $415,000
Show answer and explanation
Answer: D. $415,000
The reduction is already reflected in the amended price. There is no additional stated credit to subtract again.
5. Why can the price paid differ from a market-value opinion?
- Transaction terms, motivation, rights or included property may differ from the value definition’s assumptions
- A value opinion must always equal the first asking price
- The deed always fixes every future appraisal
- A sale price is never evidence
Show answer and explanation
Answer: A. Transaction terms, motivation, rights or included property may differ from the value definition’s assumptions
Verify the actual transaction and use the identified definition and effective date. One transaction does not automatically satisfy every assumed market condition.
6. Offer A is $510,000 with a fully applied $20,000 seller credit. B is $500,000 with no credit. All other costs and risks are identical. Which leaves more before those other costs?
- Offer B, by $10,000
- Both leave the same amount
- Offer A, by $30,000
- Offer A, by $10,000
Show answer and explanation
Answer: A. Offer B, by $10,000
A leaves $490,000; B leaves $500,000. This stipulated seller-ledger comparison does not establish either property’s appraised value.
7. A $780,000 package has a verified supported personal-property allocation of $55,000. Before other adjustments, what is the allocated realty component?
- $835,000
- $55,000
- $780,000 regardless of the allocation
- $725,000
Show answer and explanation
Answer: D. $725,000
Subtract the expressly supported allocation once: $780,000 − $55,000 = $725,000. The question does not substitute historical purchase cost or establish a complete appraisal.
8. A sale at $500,000 includes an incentive costing $10,000. Credible evidence expressly supports a $4,000 downward market adjustment. Ignore other adjustments. Which indication follows?
- $500,000 because incentives never matter
- $490,000 automatically
- $510,000
- $496,000
Show answer and explanation
Answer: D. $496,000
Use the stated supported effect: $500,000 − $4,000. The incentive’s face cost and a market-supported adjustment are different figures.
9. Does the existence of a builder incentive alone prove that a nonzero comparable adjustment is required?
- Yes, every incentive changes value dollar for dollar
- No, every incentive must be ignored
- No, analyze and support the actual market effect
- Yes, but only on new construction
Show answer and explanation
Answer: C. No, analyze and support the actual market effect
The evidence determines the effect. Fannie Mae’s cited program guidance requires supported analysis, rather than a mechanical face-amount subtraction or an unsupported zero.
10. A hypothetical loan rule permits 80% of the lower of a $520,000 price and $500,000 accepted appraisal. No other issue changes the base. What is the stated maximum loan?
- $400,000
- $416,000
- $520,000
- $100,000
Show answer and explanation
Answer: A. $400,000
The stipulated base is $500,000; 80% is $400,000. Actual approval and program eligibility require additional facts not supplied here.
11. In that same problem, ignore deposits and closing costs. How much must the buyer contribute toward the $520,000 price?
- $104,000 based on the higher price
- $100,000 based only on the appraised base
- Only the $20,000 appraisal gap
- $120,000
Show answer and explanation
Answer: D. $120,000
Price minus the stated $400,000 loan is $120,000. It comprises $100,000 of base equity plus the $20,000 gap.
12. A sale price is $480,000. Seller deductions are a $280,000 dated payoff, $8,000 credit and $17,000 in other nonduplicated charges. What are simplified proceeds?
- $175,000
- $305,000
- $480,000
- $200,000
Show answer and explanation
Answer: A. $175,000
Total deductions are $305,000. $480,000 − $305,000 = $175,000. This is proceeds under stated assumptions, not taxable gain.
13. Ordered prices, in thousands, are 200, 250, 300, 350 and 900. What is their median?
- $900,000
- $350,000
- $400,000
- $300,000
Show answer and explanation
Answer: D. $300,000
The third of five ordered values is 300. The mean is 400, a different statistic.
14. Ordered prices, in thousands, are 200, 250, 300 and 900. What is their median?
- $250,000
- $412,500
- $300,000
- $275,000
Show answer and explanation
Answer: D. $275,000
For four values, average the two middle values: (250 + 300) ÷ 2 = 275. The mean is 412.5.
15. A median rises as more high-priced homes enter the sale sample, while matched-property evidence is flat. What can be concluded?
- A sale sample can never change
- The median change alone does not prove each home appreciated
- Every home necessarily appreciated by the median’s percentage
- The appraised value of each home equals the median
Show answer and explanation
Answer: B. The median change alone does not prove each home appreciated
A sample statistic can move because its composition changes. Match the market segment, properties and period before making a broader inference.
16. A sale involves related parties or a distressed property. What should an analyst do?
- Assume every distressed sale has exactly the same market effect
- Assume every related sale is a gift
- Verify the actual circumstances and market relevance rather than automatically accept or reject it
- Automatically discard every such sale
Show answer and explanation
Answer: C. Verify the actual circumstances and market relevance rather than automatically accept or reject it
The label calls for investigation. The terms, motivation, exposure, rights and relevant market determine its usefulness and weight.
17. For this hypothetical required PTAX-203 filing, the correct unrounded Line 11 amount is $400,000.01. Under the current Step 2 rounding instruction, what is the reported figure?
- $400,000.01 with no rounding
- $400,500 as the next $500 increment
- $400,000 to the nearest dollar
- $400,001
Show answer and explanation
Answer: D. $400,001
The instructions round Lines 11 through 18 to the next highest whole dollar. This reporting convention does not change the contract price or itself decide market value.
18. A lender accepts an appraisal below the contract price. Does that alone reduce the contract price automatically?
- Yes, in every financed purchase
- No, apply the actual contract, any valid amendment or other applicable rights
- Yes, by the mortgage payoff amount
- Only if the seller’s proceeds are positive
Show answer and explanation
Answer: B. No, apply the actual contract, any valid amendment or other applicable rights
Price, valuation and contract rights are separate. A lower appraisal can affect financing and negotiated choices without automatically rewriting the agreement.
19. The buyer’s total contribution toward price is $120,000. A $15,000 earnest-money deposit is already credited toward that price, with no other cost or credit in this problem. How much remains to fund toward price?
- $15,000
- $135,000
- $105,000
- $120,000 again
Show answer and explanation
Answer: C. $105,000
Subtract the deposit already credited once: $120,000 − $15,000 = $105,000. This is remaining price funding under the stated assumptions, not a universal final cash-to-close figure.
20. For the stipulated PTAX-203 problem, $400,000 is before a qualifying $5,000 credit against price for repairs. No other consideration or adjustment applies. What Line 11 amount follows from the current instruction?
- $400,000 because qualifying repair credits are never excluded
- $395,000
- $5,000
- $405,000
Show answer and explanation
Answer: B. $395,000
The current Line 11 instruction excludes the qualifying credit or refund for improvements or repairs. Apply $400,000 − $5,000 = $395,000 in the stated simplified facts; do not generalize this to every credit or market-value adjustment.
Common questions
What is market price in a basic real estate exam question?
This page uses the common teaching meaning: the price actually paid in a particular transaction. It can differ from market value. Before closing, call the accepted amount the contract price and keep its pending status clear.
Is market price the same as market value?
Not necessarily. Market value is an opinion under an identified definition and date. The federal definition cited here uses the most probable price under stated competitive-market assumptions. A particular paid price can reflect different motivation, exposure, financing, rights or packaged terms. The definition required for an assignment or exam question matters.
Do all technical glossaries use market price identically?
No. The DRE teaching glossary uses the price-paid meaning. IAAO’s glossary uses a free-and-open-market meaning for Price, Market and separately defines Price, Sale as the actual amount exchanged whether or not established in such a market. Read a question’s supplied definition. The practical lesson remains to distinguish a paid amount, an asking or contract amount, and a value opinion.
Can an asking or offered amount still be called a price?
Yes. The broader word price can describe an amount asked, offered or paid. That does not make an asking price a completed sale. Label its stage so the reader knows what evidence the number represents.
Does contract price always become the final sale price?
No. The parties can validly amend the price, change other terms or fail to close. Verify the final agreement and closing records. A pending price should not be described as an actual closed sale merely because a contract exists.
Does the highest offer always leave the seller the most money?
No. Compare the actual credit, charge and other terms. A higher headline amount can leave less after a seller credit. Different financing, timing and contingencies also affect the overall offer decision. A simple price-minus-credit comparison is not necessarily the complete seller net.
Are seller proceeds the same as taxable gain?
No. Proceeds depend on the applicable closing ledger, including actual payoffs and charges. Taxable gain uses its own amount-realized, basis and other tax rules. A mortgage payoff is not the seller’s tax basis. The proceeds examples here do not calculate a tax liability.
Should every concession be subtracted dollar for dollar in an appraisal?
No. Analyze the supported market effect. Fannie Mae’s cited comparable-adjustment guidance distinguishes market reaction from the concession’s face cost. A supported effect could equal that cost, differ from it or support no adjustment; the evidence and applicable program rules govern. This does not change how an actual credit is entered in the parties’ closing ledger.
Can a family, foreclosure-related or short sale be useful evidence?
Potentially. Verify the relationship, motivation, exposure, rights, financing, condition and terms. Do not automatically infer a gift or disregard every distressed sale. The transaction’s relevance and reliability for the identified market-value question require analysis.
How does an appraisal gap affect buyer funds?
If the accepted appraisal is below price and the stated loan rule uses that lower base, the buyer’s contribution toward price can include both the base equity contribution and the gap. Other program rules, costs, credits and deposits can change remaining cash to close. The gap alone is not a complete funding calculation or proof of loan approval.
How does an earnest-money deposit affect remaining buyer funds?
If the deposit is already being credited toward the purchase price, it is part of the buyer’s total contribution rather than an extra amount to pay again. Subtract it once when finding what remains toward price. Actual cash to close also depends on the applicable closing costs, adjustments, credits and financing details.
Does a low appraisal force a price reduction or cancellation?
No. Read the actual contract and applicable rights. A negotiated amendment, valid contingency, additional funding or another available response depends on the facts. The appraisal itself is a value opinion rather than an automatic amendment of the sale agreement.
What does PTAX-203 show about an Illinois sale?
For covered transfers, it reports consideration and transaction information under its own instructions. Its purpose includes collecting sales data for assessment-ratio studies and equalization. The declared figure is useful evidence, but it is not a substitute for verifying the transaction or an independent appraisal. Exemptions and different reporting requirements can apply.
The current instructions exclude qualifying improvement or repair credits or refunds from full actual consideration on Line 11, include specified exchange value and outstanding mortgages to which the property remains subject, and identify included personal property separately on Line 12a. Apply the actual instructions rather than assume every closing credit has identical treatment.
Why can a reported tax figure differ slightly from a contract amount?
The current PTAX-203 Step 2 instructions round Lines 11 through 18 to the next highest whole dollar. That convention does not amend the agreement. Other differences can arise from the form’s treatment of consideration, credits, exchanged property or included personal property; investigate the reason rather than assume a discrepancy is an error.
How do mean and median differ?
The arithmetic mean is the sum divided by the number of observations. The median is the middle value after ordering an odd sample, or the average of the two middle values in an even sample. The mean is generally more sensitive to extreme values. Neither is automatically an individual property’s value or a constant-quality price-change measure.
Does price per square foot determine the whole property’s value?
No. It is a unit of comparison, and the area definition must be consistent. Location, land, design, condition, rights and other relevant differences still matter. Dividing a sale amount by an area does not by itself complete an appraisal.
How should a broker communicate price and status?
Describe the number and transaction stage accurately, using information the broker is authorized to disclose. Illinois advertising law considers whether the whole communication can mislead the ordinary consumer. Avoid presenting a proposal as a closed sale, a seller-net figure as gross price or an unsupported price as a guaranteed value.
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Official sources and scope
Reviewed October 26, 2026. The DRE glossary supplies the common price-paid teaching usage; the IAAO terminology variation is explained above. The identified federal definition and Fannie Mae policies retain their scope. Current Illinois transfer instructions address reporting. Closing and tax sources support the distinction between proceeds, remaining funds and gain, without determining a private transaction.
- PSI Illinois Candidate Information Booklet: National Valuation scope
- California DRE glossary: market price as price paid
- IAAO Glossary, third edition: price terminology, mean and median
- 12 CFR 34.42(h): the cited federal market-value definition
- Fannie Mae B4-1.3-07: comparison evidence and data verification
- Fannie Mae B4-1.3-09: market-supported comparable adjustments
- Fannie Mae B4-1.3-08: comparable selection
- Fannie Mae B2-1.2-01: purchase LTV base and program differences
- Illinois DOR PTAX-203 instructions: consideration, credits and reporting
- 225 ILCS 454/10-30: truthfulness, identity, size and owner advertising
- CFPB: payoff amount versus current mortgage balance
- 12 CFR 1026.38: closing costs and buyer/seller ledgers
- IRS Publication 523 (2025): figuring home-sale gain or loss
- CFPB: a low appraisal and contract cancellation are separate questions
This is exam preparation, not advice for a specific transaction. State law and the applicable facts control. Our editorial and corrections process explains how to report an issue.