Market Value vs Liquidation Value

[George Hatch]

Lol if you as a broker have time to market it for a highest possible price it is probably not a liquidation sale - just saying!
A liquidation sale would be an owner telling a broker they have 2 days to sell or a court order takes the property - as an example. Which would make it a cash deal, which I bet many LV fast sales are.
Auction sales show up with cash or put down a binder and pay the balance in cash in 24 hours - no financing or appraisal contingency and perhaps no permission to inspect -which is why those prices are often discounted. The people who show up to buy are usually investors not a typical owner occupant buyer - some buy sight unseen from another state-

Stop reading into the definition the additional assumptions (not stated in the definition) that you keep citing. LV is not limited to 2 days exposure or selling at auction. If it would normally take 2 years to sell a property and someone was asking for a 1-yr LV that would still be a legitimate application of the concept of LV.

 

[Carnivore]

What can you do if you fall behind on your mortgage payments?​

You have two options, either home retention or liquidation, but you must act quickly. These options are often determined by your lender. In this section we will discuss liquidation options in detail. Liquidation options are designed for the homeowner who cannot afford to remain in the home and must move out. The most common liquidation options are: the sale of your home, deed in lieu, short-sale, and other programs that are unique to your lender.

Liquidation Options – Consumer & Business

dcba.lacounty.gov

 

[glenn walker]

Another thread that went off the rails by a poster that has a obsession with definitions and pre. Printed forms. Lol

 

[J Grant]

Stop reading into the definition the additional assumptions (not stated in the definition) that you keep citing. LV is not limited to 2 days exposure or selling at auction. If it would normally take 2 years to sell a property and someone was asking for a 1-yr LV that would still be a legitimate application of the concept of LV.

I NEVER said it was limited to two days, I used 2 days as an example!
Why don't' you read my posts for content, or ask me rather than assume something like that. WTF where did I ever say LV is limited to 2 days exposure or selling at auction?

I was giving both as EXAMPLEs to make a point,, and even wrote "for example" in several of the posts. I am trying hard to keep my response polite here btw.

 

[J Grant]

the original question was for a single family. if everything listed was sold in less than 10 days with 5 bids going10% over the list price, then how do you figure a liquidation price? probable would have been the listing price. i had realtors under list a property to get it sold fast. and what happened, it sold way over list price. so a liquidation price, not talking about this now new market, was not easily determined cause everything was being sold at a crazy new higher price. in past normal times you could pick a liquidation price when everything was taking 60-90 days. so dom does have a significant affect on determining what definition they think they need used. every pre foreclosure i did in the last 4 years i could not give them a fast sale price based on a 90 day marketing time. forms don't change as fast as the market does.

You fail to grasp that LV is not simply a shortened days on market. There are other factors that must be present, a short period of time to CONSUMATE the sale and a seller under extreme compulsion to sell. Properties that sell in short market DOM on MLS in a hot market need not consummate (close the sale ) in a short time period and do not typically have a seller under extreme compulsion to sell.

 

[glenn walker]

Read your post #51

I NEVER said it was limited to two days, I used 2 days as an example!
Why don't' you read my posts for content, or ask me rather than assume something like that. WTF where did I ever say LV is limited to 2 days exposure or selling at auction?

I was giving both as EXAMPLEs to make a point,, and even wrote "for example" in several of the posts. I am trying hard to keep my response polite here btw.

Read your response to post #51 I stated I would list it and try to market it for highest price I could get seller. You said if I had time to market it then it was not a liquidation sale. So just sell it for 10 cents on a dollar because I have two days to unload it. That's not how it works the seller determines the marketing time and lowers expectations as time accumulates and I as the broker with sellers approvel A.D. just price until we find a buyer.

 

[Terrel L. Shields]

You fail to grasp that LV is not simply a shortened days on market.

If you have all the time in the world, then it isn't a liquidation.

There is always a time limit - a dead line and that is typically 30 days or less and if the typical days on market is 30 days or less, then a 30 day LV = MV. Use only comps that are 30 days or less on the market - often that means a cash buyer.

 

[glenn walker]

If you have all the time in the world, then it isn't a liquidation.

There is always a time limit - a dead line and that is typically 30 days or less and if the typical days on market is 30 days or less, then a 30 day LV = MV. Use only comps that are 30 days or less on the market - often that means a cash buyer.

The market trend determines the time we have had land in past where no matter what the price outside of auction nobody could say 2 days or 30 days. That's not common on residential but is on vacant rocks and rattlesnake desert land.

 

[J Grant]

Read your post #51
Read your response to post #51 I stated I would list it and try to market it for highest price I could get seller. You said if I had time to market it then it was not a liquidation sale. So just sell it for 10 cents on a dollar because I have two days to unload it. That's not how it works the seller determines the marketing time and lowers expectations as time accumulates and I as the broker with sellers approvel A.D. just price until we find a buyer.

you are talking like a RE broker not an appraiser. I suspect many LV sale properties are not listed with a broker. Remember LV has a short Consummation( to close) period ( not just a short DOM period )

 

[J Grant]

This is helpful. So if the client is looking for a 30 day liquidation value, look for 3+ similar sales WITHIN 30 DAYS and then make adjustments accordingly....correct?

Just because the client wants a 30 day to close for subject does NOT mean we must choose comps that sold within 30 days.
The point is to find comps that sold under duress in a short consummation period -