Fair market value is the price that a willing buyer and a willing seller would agree upon in an open market, assuming that both parties have a reasonable knowledge of the relevant facts and neither is under any undue pressure to complete the transaction. It is often used as a standard for determining the value of assets, such as real estate, securities, or personal property.
How to determine the fair market value of a car:
Kelley Blue Book: Kelley Blue Book is a well-known resource for determining the fair market value of a car. It provides information on the market value of new and used cars based on make, model, year, condition, and other factors.
NADA Guides: NADA Guides is another well-known resource for determining the fair market value of a car. It provides similar information as Kelley Blue Book and also includes a trade-in value.
Edmunds: Edmunds is another resource that provides information on the fair market value of a car. It also provides information on the dealer cost of a new car, which can be used to negotiate the price of a new car.
Professional Appraisal: Hiring a professional appraiser to determine the fair market value of a car is another option. A professional appraiser will typically inspect the car in person and take into account factors such as the car's condition, mileage, and options.
How to determine the fair market value of real estate:
Online Estimators: There are several online tools and websites that estimate the fair market value of a house based on the address or location and it's basic information like square footage, bedrooms, bathrooms and age of the house. Some you may consider include Zillow, Trulia, Redfin, Realtor.com, Eppraisal.com among others.
Comparable Sales Method: This method involves looking at the prices of similar homes that have recently sold in the same area. Real estate agents and appraisers will look at factors such as size, condition, location, and amenities to find comparable homes.
Income Capitalization Approach: This method is often used for rental properties and commercial properties. It involves estimating the potential rental income and then applying a capitalization rate to determine the value of the property.
Professional Appraisal: Hiring a professional appraiser to determine the fair market value of a house is another option. A professional appraiser will typically inspect the house in person and take into account factors such as the house's condition, location, and amenities.
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