Fair market value vs. market value
A home’s fair market value is similar to a home’s market value—what it would fetch on the open market—but is used in specialized circumstances where the concept of fairness is important to evoke so that the home’s price carries more weight.
How is fair market value determined?
To determine fair market value, a licensed appraiser gathers and measures the qualities of a home, such as its size, condition, neighborhood, and other factors. This information is used by lenders, attorneys, insurance companies, and other agencies to help determine a fair price.