Fair Market Value
Definition of "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 issued by a governmental agency permitting the recipient to do something. An example is a building permit to construct a structure. ...
Shingles having uniform length, but random width. Random shingles give a creative appearance to a roof. ...
Buyer who is acting in good faith, is not aware of any outstanding claims or rights of others to the property, and has given valuable consideration as part of the business transaction. ...
An agreement by which the owner of property (the lender) and a borrower agree to let the borrower use the property for a particular time period and in return the borrower will pay the ...
A lender can be a private individual, a private or public group, or an institution that loans funds to a person or business that the lendee would later repay with interest in most cases. In ...
Generally speaking, indemnity defines a legal principle and an ensuing agreement to calculate the amount of compensation a party is entitled to resulting from a specific financial loss they ...
Total expenditure to modernize a building to meet the owner's or tenant's needs. ...
The right to deviate from the use of land prescribed by an existing zoning ordinance. ...
The definition of the term right of way is an easement or the right of another person to pass over land owned by someone else to reach a particular destination. An individual is typically ...
Have a question or comment?
We're here to help.