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
Type of ownership by husband and wife, recognized in 27 states, in which the rights of the deceased spouse pass to the survivor. It is the same as joint tenancy, except that one spouse ...
The depreciation method where an equal amount of depreciation expense is allocated to each full period of the asset's useful life. The amount of depreciation is computed as follows; Annual ...
Purchase of part of property or property rights when condemnation takes place. The owner must be justly reimbursed. ...
An increase in the income tax basis of a property that is a result of a tax-free exchange. As a result of an inheritance, for example, the basis of the inherited property was stepped up to ...
Don’t know what snowbirds mean? It’s not birds made of snow. Snowbirds is a nickname given to Canadians and American people that live in the colder northern states, that, ...
See accommodation endorser, maker, or party. ...
The "frost line" is a critical concept in real estate and construction, especially in regions with cold climates. But what exactly is the frost line, and why does it matter? Let’s ...
Any gain or loss from selling of capital assets. The gain or loss is the difference between the net selling price and cost basis. The two types of capital gains or losses for tax purposes ...
Personal income minus personal income tax payments and other government deductions. It is the personal income available for people to spend or save; also called take-home pay. It may be a ...
Have a question or comment?
We're here to help.