How can I find out fair market value of my home?
Then, a real estate agent or tax lawyer can help you to learn more about pricing your home while taking into consideration both the market value and the fair market value. If you want to learn more about buying and selling homes, be sure to check out the Quicken Loans ® Learning Center .
What do you need to know about fair market value?
Fair market value, or FMV, is the price that your home or other assets would sell for under normal market conditions. When you’re selling your home, you’ll have it assessed and appraised. This is known as an assessment of worth. Your assessor will tell you what the appraised value of your home is.
When does the fair market value of a property change?
The FMV can change if the time period for the transaction changes. The fair market value of the property is then a fair valuation or assessment of its worth. Let’s say Joe gives his daughter Mary his house. He would owe a gift tax if he does not receive compensation from her that’s equal to or more than the home’s fair market value.
What’s the fair market value of Fred’s House?
The question of fair market value becomes moot if Mary gives Fred nothing in return—the house is a gift and he owes a gift tax. But let’s say she pays him $50,000 for the property. The house is still a gift if its fair market value is $125,000.
Then, a real estate agent or tax lawyer can help you to learn more about pricing your home while taking into consideration both the market value and the fair market value. If you want to learn more about buying and selling homes, be sure to check out the Quicken Loans ® Learning Center .
When does fair market value do not apply?
There are some circumstances where fair market transactions don’t apply. They include eminent domain, where a property is taken in lieu of sale. The seller is under duress in this case, so the IRS criteria for fair market value hasn’t been met.
How is the fair value of an asset determined?
In a fair market value transaction, the fair value market price of the asset is set by the market; it is supported by the prices similar assets have brought in market transactions, and assumes that sellers and buyers are rational actors who would not substantially overpay (in the case of buyers) or underprice (in the case of sellers).
The question of fair market value becomes moot if Mary gives Fred nothing in return—the house is a gift and he owes a gift tax. But let’s say she pays him $50,000 for the property. The house is still a gift if its fair market value is $125,000.
