Dictionary of Real Estate Terms: Net Realizable Value (NRV)
Net Realizable Value (NRV)
the amount a property is expected to bring after deductions for time on the market, selling expenses, and holding costs. Often applied to distressed properties, properties in depressed markets, or foreclosed properties owned by lending institutions.
Example: Aproperty was thought to have a market value of $1 million. It had been foreclosed and was held by a bank that expected it to take two years to sell, during which time operating expenses would exceed rental income. The bank examiner made a write-down to net realizable value, or today's present value of a future sale.
