A country church once paid $1,500 per acre more than “fair market value” for two acres of land adjoining the existing church property. In another transaction, a young couple agreed to accept $7,900 less than “fair market value” for their three-year-old tract home.
Once “fair market value” is established on real estate, other factors such as availability and time pressure may influence the final sales price. The church wanted an additional two acres adjoining church property to use for a picnic and fellowship area. Property located in any other spot would have been unsuitable. Thus the adjacent land held more value for the church because of its location, and they were willing to pay the price.
The couple that accepted $7,900 less than fair value for their home exemplifies the concept of time pressure. The husband, a middle management candidate within his company, was offered a promotion in another state. He was anxious to move and assume his new responsibilities. They weighed a higher selling price for their home against a fast move to the new job. The new job won out, resulting in a lower than fair market value sale price.
Keep in mind that even when the final sale price of real estate is higher or lower than “fair market value,” both buyer and seller may experience complete satisfaction with the transaction.
Categories: Bennington VT, Buying, Selling