Do appraisers use a different definition of value than Realtors?
Highest possible selling price versus most probable selling price. Realtors are obligated by their fiduciary relationship with the property owner to try to sell a property for its highest possible selling price. That is the definition of value that Realtors employ. The definition of value for real estate appraisers is different. Appraisers rely on fair market value. Fair market value is defined as the most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised; (3) a reasonable time is allowed for exposure to the open market; (4) payment is made in terms of
