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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 example of an arm's length sale?

For example, an individual selling their home to a buyer to whom there is no business or personal relationship nor obligation in place would be an arm’s length transaction. What does a non-arm’s length sale mean in real estate?

What are the tax implications of arm's length transactions?

Tax implications of arm’s length transactions How arm’s length transactions ensure fair market value What is an arm’s length transaction? In real estate, an arm’s length transaction refers to situations in which there is a transfer of property and the buyer and seller act independently of one another.

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