Fair Market Value
The definition of Fair Market Value in the real estate business is the highest amount that could be received on the sale of a property when there are a willing buyer and a willing seller. But that seems kind of vague, right?
Let’s give Fair Market Value some context:
Truth is whenever a home seller says “I want to sell my house!”, both the home seller and the real estate agent wants to sell the property for the highest price they can, right? However, the home buyer, obviously, wants to buy the house for the lowest price he/she can. So, an “arm wrestling match” regarding the value of the property begins. At the end of that negotiation, when the home seller and the home buyer agree on a price, we have the Fair Market Value of that estate.
Things you should be on the lookout to define a precise Fair Market Value of a property:
- How is the market right now? Do a Comparative Market Analysis.
- Is the house in good conditions? Have a professional Appraisal of the property done.
- How much would it cost to build a new one just like yours? Try the Replacement Cost Approach.
RealEstateAgent.com ADVICE:
Now that you’ve done your homework regarding Fair Market Value the choice is yours: you can either access our Real Estate Agent Directory and search our amazing database for that trustworthy real estate agent that will help you make your house sell, or you can keep searching for other terms on our Real Estate Glossary box below. Good luck!
Popular Real Estate Terms
Document between two or more parties indicating a need to take or not take a previous action taking place. For example, a bank may commit to make a loan dependent on a satisfactory credit ...
The direction in which a community is growing. Directional growth is measured over time, and its path strongly influences current and future market values of those properties clearly in ...
The Exclusive Right to Sell Listing is a type of Listing where the Listing Broker/Agent wins his/her commission even if he/she wasn’t directly responsible for the sale.Let’s ...
Major city in a metropolitan area. ...
What does viz. mean? The meaning of viz. derives from the Latin word videlicet which is translated into English as namely, that is, which is, as follows. You may encounter it in legal ...
Claude in a contract, title, or mortgage that is subject to being annulled, repealed, or revoked upon the satisfaction of a claim or completion of a future event. ...
Gradual deterioration of land due to nature such as because of floods, hurricanes and storms. Gradual decline in the value of real estate because of poor market and economic conditions. ...
Adobe construction is one of the oldest types of construction that has been used in the Americas, ancient Egypt, and the Middle East to build long-lasting structures that can be seen even ...
A large enclosed shopping mall having several national and regional retails stores acting as anchor tenants. The enclosed floor area of regional shopping centers ranges between 250,000 ...
Have a question or comment?
We're here to help.