FMP

FMP stands for fair market price, which is the actual agreed-upon amount a buyer pays and a seller accepts for a property in an open, competitive market where both parties are informed, willing and free from undue pressure. While closely related to fair market value, there is a distinction: Value is an appraiser's professional opinion, while price is the outcome of a real-world negotiation.

In practice, fair market price is reflected in the executed sales contract and ultimately recorded at closing. It serves as a key data point for appraisers when analyzing comparable sales, provided the transaction meets open-market conditions without concessions, distress or atypical motivations that could skew the result.

For loan originators and valuation professionals, understanding the difference between price and value is essential,  particularly when contract price and appraised value diverge, triggering additional review, renegotiation or restructuring before the transaction can close.