Factors that determine Fair Market Value of Property in India

Fair Market Value, nrihelpinfo

Fair Market Value (FMV) provides a lot of insights. Prominently, from the viewpoint of valuation of property in India. The owner gets to know the genuine worth of his property and land. He may avoid being fooled around. When you want to buy a property and land, you must know its FMV. It facilitates in establishing the right purchase price. It saves you from being overcharged.

Factors affecting Fair Market Value of property

There are many factors which influence the Fair Market Value of your property. With continuous changes in these factors, the value of the real estate tends to rise or decline.

Thus, as a prudent real estate enthusiast, you got to understand the variables before settling the property deal.


The place where the estate is situated can have a bearing on its valuation. If the property and land are situated in a prime location, it would clearly command a premium valuation. Prime locations indicate to the heart of the city or the commercial areas having upscale buildings and residential areas having sprawling apartments.

From the buying side, you would have to grab an apartment in these prime localities. On the contrary, being a seller would best to considerable bargaining power.

On the contrary, properties located in remote locations or on the outskirts come at a lower cost. The reason could be poor connectivity with the city center, lack of amenities, etc.


The dimensions of the property and land also play a vital role in its Fair Market Value (FMV). Whether it’s a plot, fully constructed house, a flat or independent villa; each one commands a different value. Independent villas would be costly as compared to a flat. A bigger plot of land would fetch the higher value compared to smaller one.

One more point needs to be highlighted here, i.e. the builder. Well-known builders expected to secure exorbitant rates due to the reputation and quality.

Demand & Supply

The economics of demand and supply manage the property valuation in India. Demand for residential property is growing on account of various reasons. Easy access to home loans, a rise in disposable income, the massive penetration of population from rural to urban areas, future expectations of prices are prompting demand for real estate in India. The rise in the price of substitutes, such as house rent is inspiring individuals to own a home. Hence, both favorable & unfavorable economic conditions trigger changes in the FMV of the property.

It is recommended that hire a property lawyer before you buy the property in India. The legal advice from a lawyer will be useful for completing the paperwork pertaining to your purchase with knowing the Fair Market Value of your property.

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Factors that determine Fair Market Value of Property in India

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