fair market value
Definition of fair market value
: a price at which buyers and sellers with a reasonable knowledge of pertinent facts and not acting under any compulsion are willing to do business
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First Known Use of fair market value
1891
Financial Definition of FAIR MARKET VALUE
fair market value
What It Is
Fair market value is the price at which a willing seller sells a good or service to a willing buyer.
How It Works
Let's assume John Doe wants to sell his house. He lists it for $750,000. Jane Dale wants to buy a house. She sees John's house for sale and offers him $675,000. The two negotiate the price and agree on $700,000. Because it is the price John and Jane agree to, the fair market value of the house is $700,000.
Law Dictionary
fair market value
Legal Definition of fair market value
: a price at which buyers and sellers both having reasonable knowledge of the property and being under no compulsion are willing to do business
Learn More about fair market value
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Britannica.com: Encyclopedia article about fair market value
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