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Arms length transaction

Arms length transaction

What is an Arms Length Transaction?

Arms Length is a type of transaction where the buyer and seller do not have a preexisting personal relationship. Both parties are unaffiliated and are presumed to be acting in their own self-interest.

This transaction is common and is expected. Buyers would be looking to minimize the price they pay and Sellers would be looking to maximize the value of the property. When this friction exists, the arrived-at sales price can be presumed to be a fair value of the home.

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