What is the fair market value of my real estate and who determines it?

Fair market value is a legal term defined by the courts as the most probable price which a property would bring on the open market, given prudent, knowledgeable and willing buyers and sellers. Fair market value is the standard by which the fairness of all assessments are judged.

The buyer and seller of real estate determine the fair market value of real estate. The appraiser or assessor analyzes real estate transactions that occur within a community and determine the factors that lead to the final sale prices. Information developed through the analysis of these sales is used by appraisers and assessors to develop mathematical models that are utilized in estimating the market values of all properties in a community. Some of the typical factors that are used by an appraiser in estimating market values include location, condition, age, size and quality of improvements.