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
(1) Financial ability and soundness of a business or individual to afford the purchase of property. (2) Worth of the dollar in real terms considering inflation. ...
Lender's written statement and accounting for the remaining balance, date of maturity, and interest rate on a mortgage. The lender is certifying this information to the borrower or any ...
Financial interest a developer has in a development. The interest may be a direct investment or a percentage interest in the overall profit. ...
Federal agency within the Department of Housing and Urban Development that provides financing to home buyers, particularly those with little cash or with a need to lower monthly payments. ...
Use of borrowed funds to enhance expected returns. It is anticipated that the investment will earn a return exceeding the after-tax cost of borrowing. ...
An open surface constructed on top of a flat roof. Normally, a railing is constructed on the sides of a deck roof. See also deck. ...
Retail businesses in the same locality having a parking lot servicing them. The center may contain a department store, small retailers, and restaurants. There may also be a movie theater. ...
See quantity survey method. ...
Individual: Adjusted gross income less itemized deductions and personal exemptions. After taxable income is computed, the tax to be paid can be determined by looking at the tax rate ...
Have a question or comment?
We're here to help.