Fair market value, sometimes abbreviated as FMV, is of massive significance for real estate investors and homeowners. For investors, the fair market value of home real estate establishes a baseline. If you expect it to go up, you invest; if not, you don’t. For homeowners, it lets you know how much you can expect to sell your home for. Because FMV can be confusing, many sites have implemented an FMV calculator for easy use.

To calculate the fair market value, you need to have the right information.

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Unfortunately, there’s no set formula for determining the fair market value of a property. Supply, demand, and individual circumstances will all affect how much a home can sell for. Every situation is unique. One good indicator of fair market value is the amount the last buyer paid for the property. A property comparable, or “comp,” is the value of similar properties in the same geographic area. A professional appraiser can help to determine the value of a property by performing an on-site inspection.

In addition to buying and selling, FMV is necessary for tax purposes, loans, refinancing, portfolio management, divorce, bankruptcy, and insurance claims. In all of these cases, knowing the correct value is crucial.


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