WHAT IS A FAIR MARKET VALUE?
The definition of fair market value varies according to different legal decisions and books on
appraisal. However, the following definition of market value summarizes the main points:
At any given time, the market value of an interest in land is the highest prices reasonably
expected when sold by a willing seller to a willing buyer after adequate and time exposure to
There are four major points to this definition.
1. Value is related to a certain point in time. A value for a similar property will be different,
at different point of time.
2. Value is the price that might reasonably be expected. Value is the expectation of someone
who has sufficient knowledge of the of the real estate market to form an opinion, it is not the
value placed by someone without this knowledge. thus, value is objective, based on
complete knowledge of the property.
3. Value is determined by the interaction of a willing seller and willing buyer,. This means that both
buyer and seller are prepared to enter into a bargain at the going market price and are bargaining
at arm's length. Neither party is exerting undue influence nor is there any special relationship between
them that would affect the price.
4. There is sufficient time to find a buyer, and the property is offered for sale in the open market.
I hope this will be helpful to both buyers as well as sellers in making their next move.