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Forced Sale Value (As per IVSC standards)

Forced Sale Value
(As per IVSC standards)

The term Forced sale is often used in circumstances where a seller is under compulsion to sell the property

A proper marketing period is not possible and buyers may not be able to undertake adequate due diligence

The price that could be obtained in these circumstances will depend upon the nature of the pressure on the seller and the reasons why proper marketing can not be undertaken

The price that a seller will accept a forced sale will reflect it’s particular circumstances, rather than those of the hypothetical seller

Forced sale is a description of the situation under which the exchange takes place, not a distinct basis of value

A forced sale typically reflects the most probable price is likely to bring under all of the following conditions

1) consummation of a sale within a short time period
2) the asset is subjected to market conditions within which the transaction is to be completed
3) both the buyer and seller are acting prudently and knowledgeably
4) the seller is under compulsion of sale
5) the buyer is typically motivated
6) both parties are acting in what they consider their best interests
7) a normal marketing effort is not possible due to brief exposure time
8) payment will be made in cash or immediately

When seller is not compelled for sell, he is treated as wilful seller

Forced sale transactions would generally be excluded from consideration in a valuation when the basis of value is market value

If can be difficult to verify that an arm’s transaction in a market was a forced sale

A forced sale value is the estimate of the amount that a business receive if ur sold off its assets one piece at a time during an unforeseen or uncontrollable event

Forced sale value is credit slang term for what price mortgage lenders expect a property to reach at auction if sold after repossession

Compiled by:-

Avinash Kulkarni

Chartered Engineer
Govt Approved Valuer
Regd Valuer

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