Liquidation Value

Liquidation value is an alternate value defintion (to that of market value, investment value or insurable value) that can be sought by an appraiser in an appraisal report.  Most client are familiar with market value and its definition, however few are familiar with the definition of liquidation value.  As you may recall from other parts of this website, market value requires a willing buyer, a willing seller, reasonable market exposure, etc.

Liquidation value is, however, completely different.  In a liquidation, sellers are usually not willing participants.  The sale is immediate, or transacted in such a short period of time that the property can not be exposed to the market for the typical period that it takes to secure a market price.  A forced, liquidation sale is usually transacted at a significantly lower price than that secured through the typical marketing process.

Appraisers often apply a market based discount to the the reconciled market value of a property when forming an opinion of liquidation value.

Who seeks a liquidation value?  Banks, auctioneers, hard money lenders and property owners who need to know how much a property will bring in the open market when there is going to be a forced sale with little or no exposure time.  Appraisers generally seek sales information on auctions and other forced sales when doing their research for appraisals of this type. 

Contact us with your questions or concerns regarding liquidation value or regarding your specific appraisal assignment in Nevada at 1-702-568-6699.  We can also be e-mailed at grigdon@cox.net.  

Commercial Real Estate Appraisals in the Las Vegas & Henderson, Nevada Area.