Legal Definitions - salable value

Salable value refers to the estimated price an asset or property would likely command if it were offered for sale on the open market. It represents the amount a willing buyer would pay to a willing seller, assuming both parties are well-informed about the item and are not under any pressure to complete the transaction. This concept is often used interchangeably with fair market value.

• Example 1: Selling a Used Appliance
  A family decides to upgrade their refrigerator and wants to sell their old one, which is still in good working condition. To determine its salable value, they check online marketplaces for similar models of the same age and condition. They find that comparable refrigerators are typically listed and sold for around $200. This $200 represents the salable value because it's the price they can reasonably expect to receive from a buyer who understands the appliance's condition and the current market for used goods.

• Example 2: Valuing a Small Business
  A retiring entrepreneur wants to sell their established local bakery. To determine the business's salable value, they consult with a business valuation expert. The expert analyzes the bakery's financial records, customer base, equipment, lease terms, and local market conditions. Based on this assessment, the expert determines that the business has a salable value of $300,000, which is the price a knowledgeable and motivated buyer would likely pay for the ongoing operation.

• Example 3: Assessing Damaged Property for Insurance
  After a minor fire, a homeowner's antique dining table is damaged. When filing an insurance claim, the insurance adjuster needs to determine the table's salable value immediately before the fire. The adjuster researches similar antique tables that have recently sold, considering the table's age, craftsmanship, and condition prior to the damage. They conclude that its pre-fire salable value was $1,500, representing the amount it would have fetched on the open market if it had been sold just before the incident.