{"id":2195,"date":"2025-12-05T04:00:26","date_gmt":"2025-12-05T12:00:26","guid":{"rendered":"https:\/\/www.homelight.com\/blog\/?p=2195"},"modified":"2025-12-09T04:14:33","modified_gmt":"2025-12-09T12:14:33","slug":"fair-market-value","status":"publish","type":"post","link":"https:\/\/www.homelight.com\/blog\/fair-market-value\/","title":{"rendered":"Fair Market Value (FMV): What Is It and How Do You Calculate It?"},"content":{"rendered":"

All the fun memories you\u2019ve enjoyed in your home are priceless. But the house itself will get a certain price when you sell it<\/a>, often based on its fair market value (FMV). But what is fair market value? How is it determined? And how is it different from market value or appraised value?<\/p>\n

To get you the best answers, we asked an award-winning real estate agent and a certified residential appraiser for insight. With their expertise and our extensive research, this post will provide the answers you\u2019ll need before you sell your home.<\/p>\n

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Get a Free Home Value Estimate<\/h3>\n

Enter a few details about your home, and we\u2019ll provide you with a preliminary estimate of value in less than two minutes. This won\u2019t replace a comparative market analysis (CMA) or home appraisal, but it can be a helpful starting point.<\/p>\n \n

\n Request Estimate<\/a>\n <\/div>\n <\/div>\n<\/div>\n\n
<\/div><\/p>\n

What is fair market value?<\/h2>\n

The official definition of FMV used by the Internal Revenue Service<\/a> states, \u201cFair market value is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts.\u201d<\/p>\n

It refers to the price a home would sell for if both the buyer and seller genuinely want to make a deal. It assumes neither side is under pressure, like a foreclosure<\/a> or urgent deadline, that could skew the price. It also requires that both parties understand the home\u2019s condition, market trends, and other important facts to make a sound financial decision.<\/p>\n

To put it another way, FMV doesn\u2019t necessarily represent the home’s value. Instead, it is somewhat hypothetical. It represents the estimated amount of money a buyer and seller would likely agree upon through negotiations<\/a> and under normal conditions.<\/p>\n","protected":false},"excerpt":{"rendered":"

Price your home too high and it lingers on the market, but set it too low and you could lose money. Know your property\u2019s fair market value here.<\/p>\n","protected":false},"author":291,"featured_media":37996,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"cybocfi_hide_featured_image":"","footnotes":""},"categories":[320,330],"tags":[491,285,734,735],"class_list":["post-2195","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-add-value","category-house-value","tag-basics","tag-fair-market-value","tag-what-is-a-comparative-market-analysis","tag-what-makes-property-value-increase"],"acf":[],"yoast_head":"\nFair Market Value (FMV): What Is It and How Do You Calculate It?<\/title>\n<meta name=\"description\" content=\"Price your home too high and it lingers on the market, but set it too low and you could lose money. 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