Types of Appraisal Valuation: Liquidation Value

Liquidation value is defined by the AAA as “the price realized in a sale situation under forced or limiting conditions and under time constraints. This action may be initiated by the property owner or a crediting institution.”

In calculating two previously discussed valuations—marketable cash value and fair market value—it is assumed that the seller will have time to sell the property. In the event of liquidation, however, one cannot wait to market the property properly. In such instances, creditors may be willing to accept something less than full marketable cash value for the convenience of receiving cash in hand immediately.

Related Posts
Types of Appraisal Valuation: Marketable Cash Value
Types of Appraisal Valuation: Fair Market Value
Types of Appraisal Valuation: Replacement Value

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