Fair Market Valuations
Fair Market Valuations, and Retroactive Valuations as of a date in the past, for settlement negotiations, estate allocations, planning decisions and second opinions. Not a BPO, and not a rear-facing number.
It is a written determination of what a property is actually worth in today’s market, prepared by a licensed New York real estate broker who has been transacting in these markets since 2002. It states the property, the date and definition of value, the evidence relied on, the condition assumptions, the limiting conditions, and any interest I have or might have in the property.
It is not a BPO. A broker price opinion is a short, largely mechanical product built for lenders working short sales and REO, priced accordingly and scoped accordingly. That is a different instrument for a different purpose, and if that is what someone has quoted you, you should know it isn’t what this is.
An appraised value is derived principally from transactions that have already closed. That is the method, and it is a sound one — but closed sales are a record of what the market was doing three to nine months ago, and in a market that has moved since, a number built only from them lags reality in whichever direction the market went.
A Fair Market Valuation (FMV) starts from the same closed evidence and then accounts for the conditions operating on the property now: how much competing inventory is actually on the market and how it is priced, where rates are and what that has done to the buyer pool at this price point, absorption and days-on-market direction, contract and pending activity that hasn’t closed yet, and the trend those things describe. The output is a realistic current market value — what the property would actually transact at — rather than a retrospective figure.
That is what an active broker can see and a desk review cannot. I am in these markets every week; the pending sale that hasn’t closed yet and the three listings that just sat through a price cut are evidence I have and a database doesn’t.
The same limitation applies to the automated estimate you may already have run. Where those figures are useful and where they quietly go wrong.
A note on terminology, which New York takes seriously. This is not an appraisal and I am not a New York State certified or licensed real estate appraiser. I say so in the engagement letter and on the face of every report. What New York law does not do is prevent a licensed broker from valuing real property for a fee: Executive Law § 160-b(2) says expressly that nothing in the appraiser statute precludes a person who is not a licensed appraiser from appraising real estate for compensation. The restriction is on titles and terminology, not on the work.
Different uses have different standards. A lender making a federally related mortgage loan needs a licensed appraiser — I can’t help there and won’t pretend to. A federal estate tax return has its own requirements. A contested trial may weigh a USPAP appraisal more heavily. For settlement negotiations, planning, allocation among heirs, and second opinions, a Fair Market Valuation is frequently exactly what is wanted — faster, less expensive, and current rather than retrospective. You and your attorney or accountant decide which category you’re in. I’ll give you a straight answer about where I think the line is, and I’d rather tell you to hire an appraiser than sell you something that doesn’t do the job.
Date of death. Date of commencement or separation. The date a property went into a trust. The date a partnership interest changed hands. These come up constantly in estate and matrimonial work, and they are genuinely hard to get done: many appraisers won’t take retroactive assignments at all, and those who will often price them well above a current-date engagement.
A Retroactive Valuation works differently from a current one, and on purpose. Here the closed transactions are the right evidence, because the question is what the property was worth on a date that has passed — so the method looks much more like an appraisal’s: comparable sales that closed around the target date, adjusted for condition and difference.
The problem is that the further back you go, the thinner and less reliable that record gets. Few sales on the block that year. A neighborhood that barely traded. Records that are incomplete or plainly wrong. Where that happens, I build the bridge from other evidence: assessment and other municipal data for the period, tax records, and the relevant published indices — CPI and market-specific series — applied to anchor a defensible figure where the comparable record alone will not carry one. Every one of those steps is shown in the report, because a number a fiduciary or a court may have to rely on is worth nothing if the reasoning behind it isn’t visible.
I do these routinely. I have historical market data covering my entire career in these neighborhoods, and I remember what these markets were actually doing in 2008 and 2013 and 2021 because I was selling in them.
An estate nobody dealt with in time. A parent died six years ago, the house sat, and now it has to be cleared — and everyone needs a value as of a date long past. This is one of the most common calls I get, and it is very often the thing standing between a family and closing the estate.
Estate planning done properly. Establishing values before they are contested, so the plan is built on real numbers and the people who come after you are not reconstructing them from nothing.
No. A broker price opinion is a short-form product developed for lenders handling short sales and REO — limited scope, limited analysis, priced to match. It has its uses and it is not what I produce. A Fair Market Valuation is a full written determination of current market value with the evidence and reasoning set out, prepared for a client who has a real decision or a real negotiation in front of them.
Different instrument, different question. An appraiser develops a value largely from transactions that have already closed, to a defined professional standard. That method is sound and for some purposes it is the only thing that will do — a federally related mortgage loan, for instance, or a filing whose rules require a qualified appraisal. But because it is built from closed sales, it describes the market as it was some months ago.
A Fair Market Valuation begins from the same closed evidence and then accounts for what is happening now: competing inventory, the buyer pool at this price point given current rates, absorption, pending activity, and the direction of the trend. Where the market has moved, those two numbers can differ meaningfully, and which one you want depends entirely on what you are about to do with it.
Because a free valuation is a listing pitch, and everybody involved knows it. The number is not independent of the fact that the person producing it wants the listing. When there’s a negotiation, a court, or an accountant involved, you want a document produced by someone who was paid to produce a document. That’s the whole point of charging for it.
That is genuinely your accountant’s decision, not mine, and I won’t tell you otherwise. Some purposes require a qualified appraisal by a qualified appraiser, and my work will not substitute. Others don’t. Ask your accountant what standard applies before you engage me, and if the answer is that you need an appraiser, I’ll say so and help you find a good one.
Broker opinions are used in New York matters regularly, most often in settlement and in uncontested or lightly contested postures. In a hard-fought trial, expect opposing counsel to argue that a USPAP appraisal deserves more weight, and expect them to ask whether I stand to get the listing — which is precisely why I waive it in writing on court-facing engagements. On marketability and exposure time, an active broker is the stronger witness.
No. On fiduciary and court-facing engagements I formally give up the right to solicit the listing. On ordinary engagements there’s no obligation of any kind. If you like the work and want me to sell it, that’s a separate conversation and a separate agreement.
Flat fee, quoted after I understand the property and the purpose — those two things drive the work more than square footage does. Retroactive and litigation-facing engagements cost more than a straightforward current-date opinion. You’ll have the number in writing before I begin. Fees are negotiable and not set by law.
A valuation someone paid for is a document. A free one is a pitch.
Diallo is one of the most organized, efficient, hard working realtors I’ve encountered in my career in Real Estate Law. We have working together on countless closings, and I have NEVER had a regret recommending him to client, and have continuously marveled at how thoughtful and professional an individual Diallo is.
Diallo is an excellent realtor who consistently provides phenomenal service to my clients and to me. He is efficient, dedicated, and a pleasure to deal with.
Diallo took over the renovation and sale of our parents’ properties and carried through even past the final sale and continued making necessary contacts in order to finalize unforeseen administrative details.
Attorneys and accountants: I’m glad to talk through whether a Fair Market Valuation is the right instrument for your matter before anyone spends money.
