So, by fair market value do you mean what recent comparables have actually sold for?
How long has the house been on the market?
What is the shape of the home? Does it require any major repair, or just cometic or is it move-in ready?
Do you know how many people will be splitting the proceeds of the sale? Is there any debt, liens that need to be paid off? Financial obligations may affect the ability to negotiate.
As you can see, there are a lot of things to consider, but what it comes down to is what is it worth to you? Get as many facts together as you can and make an educated decision. Just make sure you do it with your eyes wide open.