What Does FSV Stand For In Property Finance?
The term FSV is an abbreviation, the acronym stands for “Forced Sale Value“.
What it means is the FSV is the value a property may sell for in a quick sale, usually at auction. This value can sometime effect the level of lending a bank is willing to offer.
The Forced Sale Value (FSV) could be as low as 70% of the full Open Market Value (OMV).
The phrase Forced Liquidation Value may also be used when referring to a FSV.
If a property has to be repossessed by a bank or other lender due to the loan not being repaid. They usually have to arrange a quick sale, via auction. They don’t have the luxury of advertising the property on the open market for 6 to 12 months.
Therefore a Forced Sale Value (FSV) is expected to be lower than the value on the open market.
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