Fair Market Value. What is it and how do you determine the bottom line?

and depending on the method of buying it also depends on the banks appraiser agreeing on the "fair market price" that the two minds have agreed on.

Hi Richard -

I'm working on two highest and best offers right now.  I had a home buyer last week that lost their dream home to a highest and best and yes they went well over the top. It will be interesting to see what that one appraises for.  On the bright side they've already found another home and indeed their offer was accepted. 

Now if you can get appraisers and banks to agree with this we will move forward much faster.

Good morning Richard,

Fair market value and appraisal value...therein lies the rub!

In the current, crazy, Silicon Valley market, the definition of "fair market value" is even more skewed as buyers bid up properties and put them at risk of not appraising.  A good buyer with 20% down has an issue on an overbid home.

What a great way to explain the fair market value concept to buyer sand sellers.  In our market, buyers seem to think fair market value should only be what THEY are willing to pay.  Forget the seller accepting it.

You are right Richard. I tell folks unless the appraiser, tax collector, or insurance agent is buying your house it does not mean much. Fair market value is the key

Richard, great post (as always). I answer the question, "what is my house worth" with... what someone will pay for it. Now I will add to that response, "and what you are willing to sell it for".

I am reblogging this, I think this is fantastic!

These are confusing concepts for buyers and sellers.  This post goes a long way to making it easier to understand.  I think you hit it on the head with this "Fair market value depends on a meeting of the minds, and the ability to perform."

What a great post Richard. You have explained perfectly. I too am going to reblog and I suggested as well.

Richard-You provide a simple and direct definition to the often skewed concept of what market value (fair) is.  Many try to bring in all sorts of variables, but fair market value is indeed what a buyer is willing to pay and a seller is willng to accept.  Suggested!