What is the difference between an appraisal and fair market value?

Asked by Connie B, Anaheim, CA Tue Jun 2, 2009

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Vicki Lloyd’s answer
Vicki Lloyd, , Lake Forest, CA
Tue Jun 2, 2009
An appraisal is a professional licensed appraiser's opinion of what the fair market value should be, based on comparing it to similar homes that have sold recently in the area. An appraiser will make adjustments for size, location, condition and unique features, if any.

Fair market value is what a "willing qualified buyer" and a "willing seller" agree to sell for. Motivation of either party, or a whole bunch of emotional factors may come into play, so it's definately not an exact science.
1 vote
Barbara Robb…, Agent, Long Beach, CA
Tue Jun 2, 2009
An appraisal is the written form of value required by banks which takes into account listings that are on the market showing what sellers are asking, the pending and back up offers that demonstrate how long properties stay on the market and sold listings which demonstrate what the final price was that the property sold for. This form is done by an appraiser who has to go out and look at all the properties and select the ones that are closes in condition and location to the subject property and calculate the appraised value.

Fair Market Value is the value of a property based on what a seller is willing to sell a property for and a buyer is willing to pay. In a appreciating market that can be higher than an appraisal.

Barbara Robbins-Olexa,, Broker, e-Pro Internet Certified, SRES(R)
L B Brokerage
1 vote
Thank you. I purchased a "fair market appraisal" for our home and land by an independent appraiser. The amount was $150,000. Is this the maximum amount I can sell my house for since a lender will only lend to a buyer what the house appraises for? I guess what I am asking is... Is the fair market appraisal amount I received as the seller the same number as the lender will use for a buyer.

Thank you!
Flag Mon Oct 6, 2014
Mahesh Patel, Agent, Anaheim Hills, CA
Tue Jun 2, 2009
Hi Connie:
A fair market value is a guestimate of what your house may be worth, based on what has sold in your immediate neighborhood. It give you and idea of what you get for your house, in the current market.

An appraised value is the value of your home, based on the appriaser's measurements of the home, and sold acitivity in your area, condition of your home etc. The appraiser is coming up with the value of your home, usually for the bank, to see if the bank can loan you the money, based on the value of your home.
They will onlly loan you the money upto it appraised value, (certain exceptions may apply).

If a seller is selling to a buyer with seller financing, than a fair market value may be Ok if both buyer and seller agree on terms and condition, an appraisal may not be necessary, although recommended.

I will be glad to do a fair market value for your property.. please feel to contact me.
Mike Patel
Web Reference:  http://www.mikepatel.com
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