What Is Fair Market Value (FMV)?

Fair market value represents what a home would realistically fetch in a normal sale — listed on the open market, given adequate exposure, with both parties acting freely and without urgency.

FMV assumes the property is sold in a typical way over a typical timeframe. A cash offer is usually below FMV because it trades some price for speed, certainty, an as-is purchase, and no commissions or repairs.

Understanding the difference between FMV and a cash offer helps you make an informed decision: the gap is what you're paying for convenience and certainty, and whether that trade-off is worth it depends on your situation.