Fair Market Value
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Fair market value is not a phrase you hear much. You know about appraised value as being the guideline for placing a value on your property for the purposes of getting a mortgage. A professional appraiser compares your home’s location, features and size to similar homes that have sold recently and by adding and subtracting value, depending on differences in the properties, a final monetary value is determined for the property in question.
Appraisals are not exact and can vary, but usually only slightly, from appraiser to appraiser.
Fair market value is the amount a buyer is willing to pay for your home. This amount is what a buyer is ready to offer based on their own situation, local market trends, interest rates, and their personal attraction or suitability for their lifestyle to a home. Fair value is usually considered to be the fair market value – that is, the highest price a willing buyer under no particular pressure to buy would pay for the property based upon its highest and best use, were it in the hands of a willing seller under no particular pressure to sell. Home prices/values are never set in stone, and often as a buyer or seller, you will hear two or three words being used such as Fair market value, assessed value, or appraised value. If you are trying to sell your home, or better understand how your property is being valued, it is critically important you understand what these terms mean and how they differ while valuing your property.
There are intangible elements with any buyer’s offer. However, it is imperative that a seller uses only actual facts that can be verified and is careful to eliminate emotional attachment or other intangibles from the listing price.
Using a licensed real estate professional to determine fair market value, is the best way to price a new listing. They are intimately familiar with the local market and know all the trends that may not show up in current “sold” properties used as comparison.