What is the difference between market value and fair market value?

The difference between market value and fair market value is an important concept to understand when discussing eminent domain law in Virginia. Market value is a measure of how much a property is worth. The market value is determined by looking at current market conditions. It reflects the price that one would expect to receive for a piece of property if it were to be sold in a competitive market with both buyers and sellers acting in an informed and voluntary way. On the other hand, fair market value is a measure of how much a property is actually worth in a given situation. It is determined by looking at the same factors that influence market value, such as market conditions, but also considers factors that may affect the property’s actual value, such as how much it would cost to acquire a similar property or how much money the owner would be willing to accept to sell the property in this particular situation. In Virginia, the government must pay the owner fair market value for takings of private property when it exercises its power of eminent domain. The power of eminent domain means that the government is able to take private property for public use in exchange for just compensation. In order to determine the just compensation owed to the owner, fair market value must be used to determine the amount. Market value may be considered in the decision as well, but fair market value takes into account all the factors that could influence the value of the property in the current situation.

Related FAQs

What is a blight designation?
Are there any restrictions on the use of eminent domain power?
What is the Condemnation Procedure?
What is the fair market value of my property?
Who has the power of eminent domain?
What are the limits of eminent domain power?
What is the difference between just compensation and fair market value?
What is eminent domain?
How do I determine the fair market value of my property?
What is the difference between a redevelopment project and a development project?

What is the difference between market value and fair market value?

Related FAQs

Related Blog Posts