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Mortgage Repossession Valuations and Forced Sales

Wednesday, February 08, 2012 - Posted by Philip Harvey

The definition of a forced sale that Valuers use is;

"The amount which may reasonably be received from the sale of a property within a time frame too short to meet the marketing time frame of the Market value definition. In some States forced sale value in particular may also involve an unwilling seller and a buyer who buy with knowledge of the disadvantage of the seller.

Market Value, with a provision that the vendor has imposed a time limit for a completion of the sale, which cannot be regarded as a reasonable time period, taking into account the nature of the asset, its location, and the state of the markets."

So just because it is a mortgage repossession sale, it does not make it qualify for a forced sale. The key metric is the marketing time frame. This time frame varies from region to region / market to market and can be longer than 12 months for rural properties.

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