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
Same as term appraisal: Valuation assessment of real property by an expert third party for the following purposes: developing a realistic market price. setting a market value at the time ...
The modified accrual method is defined as an alternative accounting method that combines the two basic methods of accounting, the accrual method and the cash method. While the accrual ...
Representative house, apartment, or cooperative used as a sales tool to show how the actual unit bought will probably appear in design and construction. An example is a model apartment. ...
Expert in real estate who has an education in real estate appraisal as well as having significant professional experience. A recognized license may be obtained from the Member Appraisal ...
Transfer of both real and personal property. An example is the sale of a home with personal belongings. Putting together a group of property to be sold together, perhaps at a discount ...
Local regulation on how real property may be used in a particular locality. The county may establish different zoning classifications and restrictions. If the ordinance is violated, ...
Property having an easement right through another adjoining property. The property through which the easement passes is considered to have the servant tenement. ...
(1) That portion of exposed beach formed by waves depositing sand as they dissipate on the beach. The size of the berm commonly varies with the season. In the summer, the waves move sand ...
fee to use a bridge or tunnel. Fee assessed to use someone else's property. ...
Have a question or comment?
We're here to help.