FAQ

Question?

Forced Liquidation Value and Orderly Liquidation Value

What does this mean to you and the value of your assets?

Both definitions are based on a professional opinion of the estimated most probable price expressed in currency that the subject assets could typically realize, as of the effective date of the appraisal, at a properly advertised and conducted sale.
Forced Liquidation Value (FLV); the assets will be sold in the shortest possible time (typically 30 to 45 days or less) depending on how strong the market is for a specific asset

Orderly Liquidation Value (OLV); allows for more (additional, an extended timeframe, an increased amount of time), means that the time to sell the assets will increase, normally from “shortest possible time” to an expanded time frame of 180 days to as much as 365 days (six to twelve months?)
By the very nature of negotiation and the extended marketing period, an OLV, GENERALLY, yields higher prices than an FLV.
It is important to note that an OLV of assets may not bring a higher price. Some assets when put on the open market will not bring more, even with time because of many factors;
• Supply and Demand at the Time of Sale
• Potential Pool of Buyers
• Current Market Conditions

Red Stripe is constantly working to understand our changing market to help you realize the most probable selling price.

Question?

When Using “Market Data” How does the Appraiser determine the “Opinion of Value” of an asset?
By the Sales Comparison Approach:

“A set of procedures in which an appraiser derives a value indication by comparing the personal property being appraised to similar assets that have been sold recently, applying appropriate units of comparison, and making adjustments based on the elements of comparison to the sale prices of the comparable.”

The process begins by researching assets which have recently been sold or are offered for sale. These assets should have similar Make, Model, Age and similar options and specifications.
If the make, model, and age, options and specifications of the comparable asset are equal to the subject asset, the appraiser focuses on specifications or "technical" differences between the subject asset and the comparables assets, adjusting the value based on the differences.
Adjustments to value are made to the Comparable Asset not the Asset being appraised.
Auction Sale Prices: The sale price is the Force Liquidation Value when an asset is sold under duress at publicly held auction, sold as-is, where-is with no warranty and all removal cost responsible to the buyer
Asking Price: This represents the Fair Market Value “Potential” of the asset expressed in terms of cash or cash equivalent from a willing buyer and a willing seller. It is assumed that both the buyer and seller are acting at arm's length in an open and unrestricted market, neither the buyer nor seller is under compulsion to buy or sell, and both have reasonable knowledge of the relevant facts.
It is important to note that when using asking prices as a source for comparable sales, the appraiser should speak with the seller or dealer regarding discounts or special offers. It is also important to determine how long the Comparable Asset has been for sale.

E-mail: appraisal@redstripeinc.com
Phone/Fax:( 978) 689-8174