What are the benefits of arm's length transactions?

This has two key benefits: Maintain market integrity: By ensuring both parties act independently and in their self-interest, arm's length transactions reduce the risk of market manipulation or fraudulent practices. Accurate, comparable sales: Arm’s length transactions are often used as comparables in real estate appraisals.

What is an arm's length transaction in real estate?

Let’s dive into the details below. What is an arm’s length transaction? In real estate, an arm’s length transaction is when the buyer and seller each act in their own self-interest to try to get the best deal they can. In most sales, a seller is trying to make a large profit, while the buyer is trying to pay the least amount of money possible.

What is an arm's-length real estate transaction?

In property dealings, understanding this concept is crucial. An arm’s-length real estate transaction refers to a deal between two parties who are independent and not influenced by each other. In essence, the buyer and seller act with their own interests in mind, without any personal or business relationships that could sway the transaction.