Arm's-length transaction

An arm's-length transaction is one between unrelated, self-interested parties, neither under compulsion — the condition under which a recorded price plausibly reflects market value. Its absence defines the exclusions: family transfers, affiliated-entity reshuffles, estate distributions, foreclosure and other forced sales, and deals bundled with unrecorded consideration.

The screen is the foundation of comparable-sales work: valuation samples that include non-arm's-length records corrupt everything downstream. The recorded clues — party names and addresses, deed species, nominal considerations, tax treatment — usually suffice to classify, and honest analysis classifies before it averages. A price is only evidence of value if the transfer was trying to discover one.