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
Created by the US Congress in 1965, the Department of Housing and Urban Development (HUD) is the agency principally responsible for federal programs relating to housing and urban ...
Survey of the maintenance requirements for a commercial or industrial rental property for the purpose of preparing a management agreement. ...
The appellant definition references a concept related to legal proceedings. The appellant is the individual who is dissatisfied with the judgment in a lawsuit and asks for a superior court ...
Written agreement between two or more parties to extend the terms of a document. ...
A notary public's guaranteeing the authenticity of a signature. ...
When you hear someone mentioning aesthetic value in connection with real estate, that person is using aesthetic value as a way to point price appreciation added to the property because of ...
A right or portion of property reserved to the grantor in a conveyance by deed. Waiver of a requirement in a lease agreement such as the landlord allowing an old tenant to have a cat or a ...
Fixed interest rate loan in which the payments are made every two weeks, but the payment is one half the amount of a regular monthly fixed-rate mortgage with the same amortization schedule. ...
In a principal gent transaction or contract where a third party knows the name of the principal the agent represents. This is a typical setting in real estate situations. In this ...
Have a question or comment?
We're here to help.