VALUE PREMISES AND DEFINITIONS
Fair Market Value (FMV)
Fair Market Value is the price at which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition are the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:
- The buyer and seller are typically motivated,
- Both parties are well informed or well advised, and each acting in what he considers his own best interest,
- A reasonable time is allowed for the exposure in the open market,
- Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable; and
- The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.
Market Value
Market Value is similar to Fair Market Value except that the provision for lack of compulsion to
buy or sell is removed and the assumption of a sale within a specified time frame is added. Also
known as the most probable price which a property should bring in a competitive and open
market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently,
knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this
definition is the consummation of a sale as of a specified date and the passing of title from seller
to buyer under conditions whereby:
- The buyer and seller are typically motivated,
- Both parties are well informed or well advised, and each acting in what he considers his own best interest,
- A reasonable time is allowed for the exposure in the open market,
- Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable; and
- The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.
Orderly Liquidation Value (OLV)
Orderly Liquidation Value is the estimated gross amount expressed in terms of money, which
would be typically realized from a sale, as of a specific date, given a reasonable period of time,
with the seller being compelled to sell on an as-is/where-is basis, in an appropriate and relevant
marketplace with knowledgeable buyers.
Forced Liquidation Value (FLV)
Forced Liquidation Value is the estimated gross amount expressed in terms of money that could
be typically realized from a properly advertised and conducted public sale, with the seller being
compelled to sell, as of a specific date, with a sense of immediacy on an as-is/where-is basis,
without regard to the relevant marketplace.
Residual Value (Future)
Residual Value is the estimated fair market value in exchange as of a future date with no
consideration given to the effects of inflation or deflation measured from the appraisal date;
assuming the aircraft is in good condition and will continue to be maintained in good operating
condition with normal preventative maintenance; and assuming the market for used aircraft of
the same nature at the future date will not reflect unusual conditions of supply and demand.
Salvage Value
Salvage value is the estimated amount, expressed in terms of money that may be expected for the
whole property or a component of the whole property that is retired from service for use
elsewhere.
Scrap Value
Scrap value is the estimated amount, expressed in terms of money that could be realized for the
property, as a specific date, if it were sold for its material content and not for a productive use.
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AEROMAX, USA
Harry Ingram,
Senior Aircraft Appraiser
74 Lakeside Ln
Kerrville, TX 78028
Cell: (830) 446-1064
Email: aeromaxusa@gmail.com
Senior Aircraft Appraiser
74 Lakeside Ln
Kerrville, TX 78028
Cell: (830) 446-1064
Email: aeromaxusa@gmail.com
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