If you've been following our blog for any length of time, you've come to realize the many benefits of machinery valuation. But what exactly happens during a used equipment appraisal and how does each step affect the final equipment values report that is generated by the equipment appraiser? In this post, we'll show you what happens during the process and give you the inside track of what happens during equipment appraisals.
What happens during a used equipment appraisal?
- We get into contact to determine what your needs are during the machine appraisal. This includes not only the basics of the equipment and your industry, but also the reason behind the appraisal. If you're getting an appraisal to sell equipment, it may be a very different amount compared to a buyout of a company or liquidating an asset that has ceased to function, so we want to ensure your appraisal meets your company's needs. There are different levels of value such as Fair Market Value, Orderly Liquidation Value, and Forced Liquidation Value, as well as others. We'll also determine the needed date of appraisal, as insurance companies sometimes request an appraisal for equipment that has already been lost which will require a retrospective report.
- We gather the details of the equipment and examine any related paperwork that gives us a better idea of the equipment's history. Why do we need details? Much like different options on a vehicle, different versions of the same model may have additional benefits or features that can boost its value. Paperwork is checked to see if the equipment has been well maintained and kept in good repair during its use. Keeping this type of paperwork accessible during this part of the process allows us to complete the appraisal more quickly.
- We take a good look at its condition. This is the point that we actually get into the nuts and bolts of the machine. We'll take into account the conditions it is kept in, as dusty or damp conditions can quickly impact its expected lifespan. If the machine shows signs of abuse or poor repair, that will be taken into account in the final report for the same reasoning, as will signs of exemplary maintenance and care. Having the machine accessible helps speed up this part of the process.
- The machinery appraiser prepares a valuation report for the equipment. Before you hire an appraiser, be sure that they are certified in equipment appraisal, as that helps ensure the final report is acceptable to insurance companies, financial institutions and the legal system. A machinery appraiser will take all the information provided and use it to determine the equipment's value for your purposes, including all the methodology used in determining that value, then write it up into a report for your purposes.
- Any discrepancies are addressed. If something was missed in the paperwork or a vital facet of the machinery was missed, a good appraisal company will have a process in place so that you can explain your rational for why something may not have been taken into account to ensured it accurately reflects the machinery's value.
Now that you know what happens during a used equipment appraisal, you'll be better prepared for your next valuation. If you still have questions about how the appraisal process works or need to have an equipment appraisal performed by a highly-qualified equipment appraiser, please feel free to contact us. At Equipment Appraisal Services, our certified appraisers only work with industrial equipment, providing the expertise your business needs.