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
People Are Reading
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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