Definition
Realized Price is the actual total amount received or paid in a completed transaction. For auction sales, this typically includes the hammer price plus buyer’s premium and any applicable taxes or fees. For private sales, it represents the final negotiated price after all adjustments.
Significance in Alternative Asset Valuation
Realized prices are the foundation of market-based valuation. Unlike estimates, appraisals, or asking prices, realized prices represent actual transactions where buyers committed capital. This makes them the most reliable data points for establishing market values.
However, realized prices require interpretation:
- Context matters: Fire sales, estate dispositions, and dealer liquidations may not represent true market value
- Fees vary: Different venues have different premium structures affecting realized price comparisons
- Terms differ: Private sales may include non-cash considerations or extended payment terms
- Timing influences: Market conditions at the time of sale affect all prices
Understanding the difference between hammer price and total realized price is crucial. A hammer of $100,000 with a 25% buyer’s premium means a realized price of $125,000—a significant difference for valuation purposes.
How Impossival Approaches This
We track realized prices across sale venues, normalizing for fee structures and sale conditions. Our database distinguishes between different transaction types, enabling accurate comparable selection for valuation analysis.
Related Concepts
• Hammer Price - The winning bid before additional fees • Auction Value - Total value achieved at auction sales • Fair Market Value - Valuation standard based on market evidence • Comparable Sales - Transaction data used in valuation