Definition of Fair Market Value:
Orange County, California Fair Market Value:
The price that a given piece of property or home would secure in the marketplace, based on the following conditions: The prospective buyers and sellers are reasonably knowledgeable about the homes value and it is assumed that they are behaving in their own best interests and are free of undue pressure to buy or sell and a reasonable time period is given for the transaction to be completed (normally 15-60 days maximum for real estate transactions in Orange County).
Property taxes are often assessed based on the fair market value of the owner's property. Depending upon how many years the owner has owned the home, the difference between the purchase price and the residence's fair market value can be substantial. For example: Let’s say that an Orange County homeowner decided to sell their San Clemente home to a family member and they wanted to give them a great deal so they sold a home with a fair market value of $750,000 to their brother for a $600,000 purchase price. Certainly not an Arm’s Length Transaction – but still perfectly legal.