Selling Guide

The Selling Guide is organized into parts that reflect how lenders generally categorize various aspects of their business relationship with Fannie Mae. To begin browsing, select from any of the sections below. You may also download the entire Selling Guide in PDF format.

View All Selling Policy Updates

Download PDF

Hint: Ask in a form of a question.

B4-1.1-01, Definition of Market Value (04/15/2014)

Introduction

This topic contains information on the definition of market value.


Definition of Market Value

Market value is the most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

  • buyer and seller are typically motivated;

  • both parties are well informed or well advised, and each acting in what he or she considers his/her own best interest;

  • a reasonable time is allowed for exposure in the open market;

  • payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and

  • the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

Note: Adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are necessary for those costs that are normally paid by sellers as a result of tradition or law in a market area; these costs are readily identifiable because the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments can be made to the comparable property by comparisons to financing terms offered by a third-party institutional lender that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar for dollar cost of the financing or concession, but the dollar amount of any adjustment should approximate the market’s reaction to the financing or concessions based on the appraiser’s judgment.

Related Articles

B4-1.1-02, Lender Responsibilities (09/04/2018)

IntroductionThis topic contains information on lender requirements, including: Lender Responsibilities  Confirmation and Documentation of the Current...

Read more

B4-1.1-03, Appraiser Selection Criteria (01/31/2017)

IntroductionThis topic contains general information on appraiser selection, including: Appraiser License and Certification  Appraiser Trainees ...

Read more

B4-1.1-04, Unacceptable Appraisal Practices (04/15/2014)

IntroductionThis topic contains examples of unacceptable practices, many of which are reflected in the appraiser’s certifications on the appraisal...

Read more

B4-1.1-05, Disclosure of Information to Appraisers (12/06/2016)

IntroductionThis topic contains information on lender disclosure of information to appraisers, including: Overview  Sales Contract Information ...

Read more

B4-1.1-06, Uniform Appraisal Dataset (UAD) and the Uniform Collateral Data Portal (UCDP) (07/03/2019)

IntroductionThis topic contains information on the Uniform Appraisal Dataset and the Uniform Collateral Data Portal, including: Uniform Appraisal Dataset (...

Read more

Have guide questions? Get answers to all of your policy questions, straight from the source.

Get Started
X
Having Issues with Seeing this Page Correctly?

Use Firefox or Chrome   How to do a hard refresh in Internet Explorer
We recommend that you use the latest version of FireFox or Chrome.

Download Firefox
Download Chrome
  A hard refresh will clear the browsers cache for a specific page and force the most recent version of a page.
    Hold the Ctrl key and press the F5 key.
     

Email Us
If you still have Technical Support questions, feel free to emailAsk_Poli@fanniemae.com.