Liquidation

The premise of value is different. Standard appraisals assume a willing seller with reasonable exposure time. Liquidation appraisals assume a compelled sale within a limited timeframe, which typically produces a value below market value, and quantifying that discount is the heart of the assignment.

Timelines are compressed. Bankruptcy schedules, court deadlines, and creditor pressures often require expedited inspections and rapid reporting without sacrificing the rigor that legal scrutiny demands.

The analysis pays particular attention to distressed market evidence. The appraiser weighs sales of comparable properties under similar constrained conditions, applies conservative income assumptions where relevant, and documents the marketing time assumed in the conclusion.

Market value assumes a property is exposed to the market for a reasonable period and sold between willing, unpressured parties. Liquidation value assumes the seller must sell within a defined, limited timeframe. The shorter the required timeline, the deeper the discount from market value.

Appraisers distinguish between orderly liquidation, where there is some time to market the asset, and forced liquidation, where sale is nearly immediate. Each premise produces a different number, and the right one depends on the legal and financial context of the sale.

Using the wrong premise has real consequences. Overstating liquidation value misleads creditors and courts about recovery, while understating it invites assets to be sold for less than they should bring. A qualified appraiser matches the premise to the proceeding and supports the discount with evidence.