Fair Market Value (FMV)

Fair Market Value (FMV) is the estimated price at which a property or asset would sell in an open and competitive market. It represents the value agreed upon by a willing buyer and seller, both knowledgeable and acting in their own interests. FMV is used in various financial contexts, including loan management, to determine collateral value and assess loan-to-value ratios. 

Accurate FMV assessments help lenders make informed lending decisions and manage risk by ensuring that loan amounts are appropriate relative to the value of the secured asset.