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About
Appraisals >Fair Market
Value
What
is the best price for a piece of real estate? Mortgage
lenders, appraisers, and real estate brokers use what is
called the "fair market value" (FMV). FMV has been defined
as "the price that a buyer is willing to pay and the seller
is willing to accept, when both parties are knowledgeable
about the property and neither is under any time pressure to
buy or sell". Sounds great, but how is this price
determined?
The starting point for determining a
fair price may be an opinion of the value or "comparative
market analysis". Such an analysis uses information on
similar properties which are: 1) currently for sale, 2)
already sold, or 3) expired properties (those which did not
sell). Local, national and international trends and market
conditions must also be evaluated.
By comparing
similar properties in each of the three categories and the
market conditions, appraisers, lenders and agents come very
close to the maximum price that buyers would be willing to
pay for a house.
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| Q |
What
are considered the ideal conditions for a seller's
market?
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| A |
In
a seller's market, prices are firm and good houses are
sold before advertised or as soon as they show up in
the MLS. |
 See More Real Estate
Trivia > | |
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