Fair Market Value Vs. Appraised Value
If you're planning to purchase a house or business in the near future, it's important to get a clear idea of the difference between the fair market and appraised values of property.
Other People Are Reading
-
Fair Market
-
The fair market value of a piece of property is the amount that a buyer is willing to pay today. To determine an accurate fair market value, a buyer can't be subject to unusual influences and should be acting in his best interest.
Appraised Value
-
The appraised value of an item is the amount that a third-party, professional appraiser determines it's worth. An appraised value is common in the sale of a house or business. The appraiser evaluates the property based on features and recent sales of similar items.
-
Considerations
-
While fair market value stems from the free opinion of a potential buyer, an appraised value is a third-party opinion from a hired professional. While the appraiser can give an educated guess on the value of the property, he cannot guarantee that a buyer would be willing to actually pay a certain amount.
-
References
- Photo Credit Thinkstock Images/Comstock/Getty Images
