Market value and Fair Market Value (FMV) are both concepts used to estimate the worth of an asset. They oftentimes serve similar primary purposes and can be determined through similar processes.
Market value is most commonly associated with real estate. It is commonly an appraiser’s professional opinion of a property’s worth at a specific point in time. Appraisers consider various factors such as comparable sales, the property’s condition, location, size, and current market trends to arrive at this value.
Fair Market Value is similar, but may include additional specific legal definitions. FMV is often cited as “the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts.” This definition is often used across various legal and financial contexts, including taxation (estate, gift, and income tax), bankruptcy, insurance claims, and divorce settlements.
These and other types of values can be used by appraisers in completing an appraisal report. The type of value opinion sought can often be determined by the purpose for ordering the appraisal.
Whatever the type of valuation sought, 406value.com can help provide you a competent professional valuation report.