Real Estate Term
Fair Market Value
The price a property would sell for in a competitive market with willing buyers and sellers.
What is Fair Market Value?
Fair market value is the price a property would sell for between a willing buyer and a willing seller, both informed and under no pressure, in an open and competitive market. It is the benchmark appraisers, agents, and assessors use to judge whether a price or offer is reasonable. Fair market value can differ from both the asking price and a municipal assessment, since those serve different purposes.
Frequently asked questions
Related terms
AppraisalA professional assessment of a property's market value, typically required by lenders before approving a mortgage.Comparative Market Analysis (CMA)An analysis of recently sold properties similar to the subject property, used to determine market value.AssessmentThe value placed on a property by a municipality for tax purposes.AppreciationAn increase in property value over time due to market conditions or improvements.MortgageA loan used to purchase real estate, with the property serving as collateral.
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