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Question of the day!?

Discussion in 'Lawn Mowing' started by Forest, Sep 7, 2004.

  1. Forest

    Forest LawnSite Member
    Posts: 108

    I have a question for you ladies and gents that I was hoping someone might be able to shed some light on for me. I was wondering if anyone can explain to me what "Fair Market Value" is?? I think I have an idea but am overall unsure. Any help would be greatly appreciated. Thanks folks. -Forest.
  2. sildoc

    sildoc LawnSite Silver Member
    Posts: 2,925

    Fair market value is.............
    The average price of what a person is willing to pay for a certain service/item/object in your particular area.
    Take for instance a 4x4 truck. In the areas that get alot of rain and snow a 4x4 will go for more money than a 4x4 in say florida or southern california.
    Forest likes this.
  3. SellPoint

    SellPoint LawnSite Member
    Posts: 32

    In real estate it generally means the price the buyer is willing to pay and the seller is willing to take based on comparable properties within the same market.
    Forest likes this.
  4. Forest

    Forest LawnSite Member
    Posts: 108

    Thanks sooo much guys....I had a chat w/ a family member who disagreed with that thought and so I thought that I'd clarify. That's exactly what I was thinking. Thanks again. -Forest.
  5. Remsen1

    Remsen1 LawnSite Bronze Member
    Posts: 1,020

    out of curiousity... what did they think it meant?
  6. Forest

    Forest LawnSite Member
    Posts: 108

    Remsen, what my family member tried so hard to beat into my head was that "fair market value" was a concept in determining what the market value of my entire business was worth assuming i was forsale. As pointless as our mear debate was, I knew that it was inaccurate, but I needed to find out for sure. Thanks for the help guys! BTW...the business is not and wont be for many many many moons to come! Best of luck. -Forest
  7. jerryrwm

    jerryrwm LawnSite Bronze Member
    Posts: 1,274

    Sounds to me like you both were saying the same thing but from opposite ends.
    Your arguement was that FMV was what a given product or sevice (lawn care) could be sold or charged for. His was the FMV was what a given product (your business) could be sold for. I think that's what I understand it to mean.

    I also wanted to pass on a quote that a very successful former owner once told me. "Run your business like you are trying to sell it tomorrow. You never know who will come up with the right money. If you don't sell it today, the business is going to run smoother tomorrow because of the details you did today." And yes I did say former owner - because he and his partner after 18 years in the business, sold during the "big buyout rush" a few years ago. And $20 million wasn't too bad.

    Forest likes this.
  8. Gravely_Man

    Gravely_Man LawnSite Silver Member
    Posts: 2,076

    One thing to keep in mind is fair market value is also dependant on where you are. That is a regional issue. What one person pay for truck X might not be the same someone else would have to pay for the exact same truck in another area of the country.

    Forest likes this.
  9. Forest

    Forest LawnSite Member
    Posts: 108

    All great points to take into consideration. Thanks again guys. -Forest
  10. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    fair market value is directly related to what your competitors are charging. this is why i've said over and over, your competition WILL dictate how much you can charge

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