Find out Key Concepts, Formula, Methods and Cost Approach of FMV.

Determining the fair value of land when making real estate decisions is crucial. Whether you are a buyer, seller, or investor, understanding how fair value is calculated, the influencing factors, and how it differs from market value will give you an advantage in negotiations and transactions.



Despite challenges like market volatility and limited data, using methods like the cost approach, sales comparison, or income capitalization approach can provide a comprehensive estimate of the property's worth. Remember, knowledge of fair value is power in the real estate world.

FMV: Formula

Fair Value=(Future Cash Flows × Discount Rate)