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arm's length in real estate
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The difference between arms-length and non-arms-length transactions lies in the relationship between the buyer and seller. An arms-length transaction refers to a deal where both parties are independent and unrelated, negotiating at equal bargaining power. In contrast, a non-arms-length transaction involves related parties, potentially leading to less fair pricing. In real estate, an arms-length transaction ensures a fair
market value, crucial for investors, lenders, and tax authorities.
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