The term 'fair market value' refers to:

The term 'fair market value' is defined as the price a property would sell for on the open market. This concept is crucial in real estate as it reflects an objective assessment, determined by what willing buyers and sellers agree upon in a competitive marketplace. Fair market value takes into consideration various factors, including the current condition of the property, recent sales of comparable properties, and overall market conditions.

This valuation is important in numerous scenarios, such as during the sale of a property, when assessing property taxes, or in legal situations like divorce or estate settlements. It ensures both the seller and buyer have a reasonable expectation of the property's worth based on market dynamics.

In contrast, the other options do not capture this accurate and objective assessment:

• The price a seller wants may not reflect the true market conditions or the actual worth of the property.

• An estimate from a real estate agent is subjective and could vary from agent to agent based on their opinions or biases.

• The cost to build a similar property is a different valuation method that considers construction costs, which may not align with the property's current market value and does not take into account the existing market factors influencing the sale price.