Liquidation Matters

Lee Property valuers can complete a market assessment of a property that must be liquidated, often assisting with timing of the sale to maximise the return rather receive a price well below fair market value.  There are a number of factors to consider such as market conditions, supply and demand of similar properties, economic conditions, statutory requirements and other factors, which may have an impact on marketability.

Liquidation value is the likely price of a property when it is allowed insufficient time to sell on the open market, thereby reducing its exposure to potential buyers.

Liquidation value is typically lower than fair market value. Unlike cash or securities, non-liquid assets such as real estate, often require a period of several months in order to obtain their fair market value in a sale, and will generally sell for a significantly lower price if a sale is forced to occur in a shorter time period.

The Liquidation value may be either the result of a forced liquidation or an orderly liquidation. Either value assumes that the sale is consummated by a seller who is compelled to sell and assumes an exposure period which is less than market normal.