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
Unsecured long-term debt. There is no collateral or lien on the property. A debenture can only be issued by a financially sound borrower with an excellent credit rating because no ...
Surveying the land to determine its suitability for a specific purpose, such as building a high-rise apartment house. ...
Interest computations based only on the original principal. For example, the simple interest on a $100,000, 8% loan is $8,000. It is compared with compound interest which is applied to the ...
List of business property. ...
Wondering what “de facto” means? Well, because it’s a Latin word, let’s give a formal definition. De facto is Latin for indeed, in fact, in reality, actually. An ...
Court or government regulatory order to stop doing something, such as not showing minorities certain neighborhoods. ...
Literature, samples, equipment, tools, and other useful information that real estate brokers or agents can use for demonstration purposes to prospective buyers. ...
The selling of a parcel of land whereby the original owner agrees to immediately leaseback the property. The advantage of the land sale-leaseback in that the original property owner can ...
Before getting a loan to buy a property, you must know the definition of foreclosure. A foreclosure is the process of making a loan due immediately. Technically, a loan becomes due way ...
Have a question or comment?
We're here to help.