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
Broadly speaking, a commission is a remuneration a person receives after acting on someone else’s behalf.In the real estate world, you’ll usually hear the term “sales ...
Legal claim with enough basis in fact to have a lawsuit. ...
Local governmental ordinance breaking down the country into districts that are restricted on how private property is to be constructed and used. It applies to the land and buildings. The ...
Lender has an equity interest in the property that is the subject of the loan. The lender shares in the increase in market price of the property as well as any net income generated. ...
Right to use property in the absence of forcible eviction by another. Some state laws allow squatter's rights to convert to bona-fide title over time. For example, if it cannot be ...
Claim by a real estate broker that his or her actions were the principal cause of the completion of a property sale between two parties. A successful procuring cause claim would entitle a ...
Founded in 1908 and located in Washington, DC, BOMA has 7,500 members and 10 regional groups and 6 state groups. It consists of managers, owners, investors, and developers of commercial ...
Vendee refers to a person to whom something is sold. The meaning of vendee is a buyer of goods and services. A more common term for vendee is a purchaser. While a vendor is a seller, the ...
A sash window having two vertically moving sashes respectively offset by sash weights. Each sash closes a different part of the window. ...
Have a question or comment?
We're here to help.