“Fair Market Value” (FMV) is defined as the estimated amount, expressed in terms of money, that may reasonably be expected for a property in an exchange between a willing buyer and a willing seller, with equity to both, neither under any compulsion to buy or sell, and both fully aware of all relevant facts as of the specific date. Additionally, implicit in this definition are the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:
- Payment is made in terms of cash in United States dollars or 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.
Installed Fair Market Value (sometimes called In-Place Fair Market Value) encompasses the same basic definition as outlined above except it is an amount that may be reasonably expected for an installed property and also includes all normal direct and indirect costs such as assemblage costs necessary to make the property fully operational (soft costs). Soft costs may include freight, installation costs and materials and software. The soft costs are amortized over the initial term of the lease and any buyout of the assets prior to the end of the initial term should include any un-amortized amounts.