Fair Market Value (FMV)

Fair Market Value (FMV) is defined as the price at which property would change hands between a willing buyer and a willing seller, both of whom are knowledgeable about the relevant facts and neither bEINg under any compulsion to buy or sell. This valuation is typically used in various financial contexts, including real estate transactions, tax assessments, and the sale of Assets.

FMV is determined by various factors, including:

• Market conditions
• Location
• Property condition
• Comparable sales

For example, if a house in a neighborhood sells for $300,000 and similar homes are selling for $280,000 to $320,000, the FMV of the house might be considered to be around $300,000 based on comparable sales.

In legal cases, FMV can be used in situations like divorce settlements, where Assets need to be fairly valued, or in cases of Eminent Domain, where the government must compensate property owners at FMV for properties it seizes.