Fair market value is generally an estimate of the price at which property could change hands between a willing buyer and a willing seller when neither is under unusual pressure and both have reasonable knowledge of the relevant facts.

How fair market value differs from retail replacement value

Retail replacement value may estimate the cost to replace an item through an appropriate retail source. Fair market value focuses more closely on an ordinary sale in the relevant market.

Factors that can affect fair market value

• metal type, purity, and weight
• gemstone identity, quality, condition, and documentation
• craftsmanship and design
• brand or maker recognition
• age, rarity, provenance, and collectability
• current demand and comparable sales
• the market in which the item would reasonably be sold

Why the intended use matters

Fair market value may be relevant for estate planning, charitable donation, tax, divorce, or other legal and financial contexts. Requirements vary, and a qualified professional should determine the appropriate valuation standard for the specific purpose.

Is fair market value the same as an immediate cash offer?

No. A dealer or rapid-sale offer may be lower because it can include risk, overhead, remarketing costs, and profit margin.

A valuation is most useful when its purpose, market, effective date, and assumptions are clearly stated.