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Glossary of Real Estate Terms

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Term Definition
Arm's-length transaction
A transaction between individuals who do not have a conflict of interest or reason for collusion. The parties are as strangers to each other. The value of property should be questioned for fairness or accuracy if there is not an arm's-length transaction between the seller and buyer. An appraiser should not use comparable sales not closed by an arm's-length transaction in the market approach to value.
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