Equipment Appraisal Blog | Understanding Machinery Appraisals

Your equipment is only as valuable as its appraised value, whether you're trying to sell a crane at auction, write off a business purchase on your taxes, or estimate the value of equipment damage. Learn 5 things to look for when selecting a crane appraisal firm or individual who can accurately value your crane. 

1.  ASA certification 

It's always important to make sure that any appraiser you select is certified by the American Society of Appraisers or ASA. The ASA offers a Machinery & Technical Specialties (MTS) designation, which denotes appraisers with particular knowledge of machinery and heavy equipment. When you're getting a crane appraised, look for an appraiser with this designation to enjoy full confidence you're getting an expert on cranes. Additionally, consider an appraiser who belongs to the Association of Machinery and Equipment Appraisers or a comparable organization. Membership in this organization suggests both firsthand knowledge of heavy equipment and professional expertise in its appraisal. 

2. Knowledge of heavy equipment

Appraisers specialize in different industries and items. You wouldn't approach a rare books appraiser and expect them to provide an accurate value for your construction crane or vice versa. Never compromise on this point: To obtain a useful value, whether you want to sell your crane or make an insurance claim for damage, you need an appraiser who understands the value of your equipment via firsthand knowledge of cranes like yours. If you hire a general appraiser, they may be able to run an internet search or check in a book to provide a rough estimate of value. However, they cannot accurately account for the value of specific attachments or assess the impact of damage on the crane's utility. 

3. Knowledge of the industry

In addition to hiring an appraiser who really knows cranes, it's smart to hire someone who accurately understands your industry. Like real estate, any commodity is only as hot as the market at the time you want to sell. If the construction industry is in a slump, your crane will find few buyers at auction. You may need to sell for less to get rid of the equipment, or hang onto the old machinery until circumstances approve. An experienced appraiser can walk you through the market, industry and timing as they pertain to equipment value. 

4. Solid network of contacts 

You'll realize the biggest benefit if you hire an appraiser who has a rich network. Whether you need to sell the crane quickly at auction or get damaged equipment serviced, a highly connected appraiser can refer you to the right people. This may make all the difference between selecting an auction house that specialize in heavy equipment -- where your crane will go fast and for a fair price -- and ending up with a bad fit where you don't get the results you seek. 

5. Strong communications skills 

After all the above criteria have been satisfied, select an appraiser who has demonstrated strong communications skills. It's important to get an accurate appraisal, but it's also beneficial that you comprehend why your crane has a certain value and what factors affect this value. This way, you can understand what maintenance tasks are vital if you wish to sell the crane. An appraiser with good communication skills will be able to break down this information for you in clear language, so you know your next steps. 

Once you've found someone who meets all 5 criteria, you can schedule your appraisal with confidence. 

If you have heavy construction equipment that you no longer need, selling that equipment at auction makes a lot of sense. Because auctions attract a lot of buyers, they are quick places to sell your equipment, compared to trying to sell something like a crane on your own. Finally since the auctioneer mediates the process, selling your equipment at auction can be less stressful for you. To prepare your heavy equipment for auction, it can be essential to have equipment appraisals done. Learn more. 

Why Have a Crane Appraisal Before Auction 

To understand the benefits of heavy equipment appraisals before auction, think about it from the buyer's perspective. A buyer is visiting an auction in hopes of getting needed equipment at a great price. They may be shopping on a budget, but still want to get a good piece of equipment. 

Appraisals can also help shoppers compare like items. If your crane is more powerful than others on auction, the appraisal can indicate this. If you really want to move your construction equipment, an appraisal is one additional piece that can make your piece stand out. 

Some buyers may be new to the auction scene. These buyers in particular may be hesitant about purchasing used equipment at auction due to not knowing what the market brings for the typoe of equipment. When they can view an appraisal, and see an independent valuation of that crane by an expert, it can provide them with useful knowledge. This can help them bid with confidence. 

While a crane appraisal benefits the buyer, it also benefits you. If you are ready to sell a crane at auction, you probably need the money for other purposes. In this case, it's better to sell the item quickly, even if you get a little less than you hope, than to hang onto that crane for months. Time you spend trying to sell the crane yourself takes time away from needed tasks. 

An auction allows you to sell your crane quickly so you can move on to other things. Getting that appraisal done can increase the likelihood that you sell the crane at auction because you will have an idea of what it may sell for.

How to Find Heavy Equipment Appraisers

When you are preparing to have a piece of machinery appraised, it is critical that you find a certified appraiser. If the appraiser you hire is not certified, the report may not meet the Uniform Standards of Professional Appraisal Practice (USPAP). Appraisers that follow USPAP provide unbiased opinions of value.

Look for an appraiser who is certified and has performed construction appraisals in the past. This person will be familiar with the best ways to take the value of heavy equipment like cranes.

When you're getting ready to sell your old crane, buy a new-to-you crane or get a heavy equipment appraisal, what kind of things affect your machinery valuation? From the good to the bad and the ugly, let's take a solid look at things that can affect a crane appraisal.

Good: These Items Typically Increase Equipment Values

• Options or kits that are approved by the manufacturer or designed based on the machine's specifications. Because the additions have either been approved by the manufacturer or are designed for that specific crane, the equipment appraiser knows this is a value-added item rather than one that can cause more problems down the road.
• Exceptional maintenance that has been well documented. Equipment appraisers know that well-maintained machinery will typically provide excellent performance down the road and has not been abused on the job site.
• All systems are functional and in good repair. You wouldn't buy a truck to go off-roading in if the four wheel drive wasn't working, would you? A crane appraisal needs to show any problems with the crane, including items that haven't been repaired or that are on the verge of failing.

Bad: These Items Typically Decrease Equipment Appraisals

• Lack of maintenance logs. You might have done the work you've claimed, but can you prove it? An appraiser has to assume that proper, timely maintenance and repairs were not undertaken unless there's documented paperwork showing the work was done, even if it's only a parts store receipt because you did the maintenance in-house.
• Welds, bends or cracks. These are signs that the crane may have structural damage and could cause serious safety issues down the road. You wouldn't buy a crane if you had to worry about a wrecking ball falling on the cab, would you?
• Dents, badly scraped or scratched paint and other signs of abuse. Though these may not directly impact the functionality of your crane, it does show shoddy upkeep at best and terrible abuse at the worst. Paired with other problem signs, this tells an appraiser that your crane personnel weren't properly trained or were lazy or negligent in how the crane was being operated. 

Ugly: These Items can go Either Way

• New bodywork and paint. Sure, it looks great, but what's it covering up? Unscrupulous sellers will do a quick job of cleaning up an abused crane to make it look nice, even when it's been all but torn to pieces in the field.
• Wear that is not reflected in the number of hours on the machine or a broken meter. That crane may show 3,000 hours, but if the controls are beat up or there's wear on the outriggers that suggests much more time in the field, there's a good bet that something's not right. A broken meter is often viewed in the light of missing maintenance paperwork - not proof of guilt, but definitely suspicious.
• Paperwork that is . . . mostly . . . clear. Whether it's a salvage title, something off with property tax receipts or similar paperwork, bad paperwork is a legal headache waiting to pound your temples together.

By knowing what a machine appraiser is looking for when completing your crane appraisal, you can easily get everything together that's needed to ensure you receive an equipment value that is fair for your crane. It also makes the process go smoothly and more quickly when you have everything that will be needed close to hand instead of buried in a random box of receipts in your office or attic.