Types of Appraisal Valuation: Fair Market Value
Fair market value (FMV) is favored by the IRS and is defined as “the price that property would sell on the open market between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts.” FMV is what a property owner would expect to receive if they were to sell a newly purchased object at a later date. This is frequently less than what was originally paid, especially if top price had been paid. As a result, fair market value is most frequently a lower value than replacement value.

The IRS has determined that fair market value is a gross value and may include sales commission or buyers premium.

Related Posts
Types of Appraisal Valuation: Liquidation Value
Types of Appraisal Valuation: Marketable Cash Value
Types of Appraisal Valuation: Replacement Value

Read more: http://www.carolineashleigh.com/2010/07/types-of-appraisal-valuation-fair.html