 Sam
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Joined: 21 May 2005
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Location: CALIFORNIA
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Posted: Fri Apr 09, 2004 11:44 pm Post subject: Fair Market Value
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Fair Market Value is the price at which the property would change hands between a buyer and a seller, neither of them is under compulsion to buy or sell, and both have reasonable knowledge of the relevant facts. It is the highest price that a willing buyer would pay and the lowest price that a willing seller would accept. Both parties should be fully aware of all the facts and consider it as an equitable exchange.
To determine fair market value it is common to compare other similar properties sold near the same time as your property and then adding or deducting amounts based on differences in quality and size of the property. It is also known as "true market value", "current market value", or "home market value".
For example, Jimmy is interested in purchasing a home from Kris whose value is supposed to be $500,000. John made a survey and found that the taxes are due, so he offered Kris $450,000. Kris being aware of the situation accepted the amount. Thus, John purchased that house from Kris in $450,000. |
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