Definition
Fair market value is the price a willing buyer and willing seller would agree on under normal market conditions. It assumes adequate time, reasonable exposure, and no unusual pressure. It's the standard used in appraisals.
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Fair market value is the standard in appraisals, insurance, and assessments. It assumes a reasonable exposure to the market and normal market conditions.
Pro Tip
Understand fair market value independent of what anyone is asking. That's your true negotiating baseline.
Example
The appraiser estimated fair market value at $385,000 based on comparable sales and market conditions.