Equipment Appraisal Blog | Understanding Machinery Appraisals

 

Machinery & Equipment valuations rely in large part on available market data that can be researched and considered. This information can be in the form of recent sales, current listings, new equipment pricing, opinions on normal useful life, and average annual levels of market depreciation.

Two of the most common sources of this data are equipment dealers (vendors) involved in the retail sale of new and used machinery, and auction companies, who liquidate thousands of used machines each and every year through advertised public sales. How does an experienced appraiser review these sources, and consider them when valuing similar assets?

The answer to that question will likely vary somewhat depending on the appraiser you are working with, however, it is important to first understand the differences between equipment dealers and auctioneers, along with the levels of value each of these sources equate to.

New and Used Equipment Dealers

These market sources are usually experienced in specific equipment types and manufacturer/model lines and can provide valuable insights on the overall market, new and used equipment pricing, normal useful life, and how the assets typically decline in value over time. This data and their general opinions are viewed as direct Fair Market Value comparisons, however, they can also discuss how they purchase used equipment such as typical buy/sell margins from an Orderly Liquidation perspective.

It is important to keep in mind that, although equipment dealers are considered experts in their specific market areas, there may be some level of bias associated with their opinions. It is always a good idea to consider additional perspectives in order to gain a balanced conclusion of value.

Equipment Auctioneers

Auction companies are well recognized in many types of equipment markets, most notably in construction, earth moving, transportation, material handling, machine tools, and certain industrial manufacturing industries. Auctioneers provide a convenient, time-sensitive opportunity to liquidate assets under an organized public sale, and may even provide guaranteed buy-out options as an alternative for those unwilling to take on the risks associated with a “no-reserve” sale.

Because these sales are in the public arena, much of the data can be discovered quite easily through company websites, online databases, and other open sources. Auction sales data technically falls under the comparison to Forced Liquidation Value from an appraiser’s perspective, and actual realized sales can vary greatly depending on the type of equipment, buyer turnout, seasonality, and any number of other factors. Because of the potential inconsistency associated with this data, it is important to understand how best to consider it in conjunction with other sources of data to then conclude on a reasonable value.

In summary, new and used equipment dealers, along with auction companies, are considered two of the most important market sources of data for machinery & equipment appraisers. Making sense of this information and ultimately forming an opinion of value for the actual assets being appraised is the most critical step in any valuation effort. Engaging with an experienced, independent, accredited appraiser will provide you with confidence that the result will be credible and reliable.

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.

PRESS RELEASE

Youngstown, Ohio --- EquipmentAuction.com, LLC today announced the start of the sale of 19 industrial robots currently utilized at the Honda of Canada automotive assembly plant in Ontario, Canada.

This week celebrates the sixth annual National Robotics Week, a special week designed to educate the public about how robotics technology provides an important impact on society. Leading universities and companies have come together to promote the benefits of robotics. In conjunction with this week, these robots are being made available to the general public for purchase. Currently utilized by Honda, the robots are fully equipped and can be relocated for use in educational or other industrial facilities.

The available robots include Yaskawa Motoman models UP60, UP120, UP130, UP165, UP200, K300, and SK16. In addition to the robots, there is miscellaneous material handling equipment available.

The online auction is currently underway and runs through April 30, 2015. It is in the form of an “absolute auction” with no buyer premium.

Companies looking for used equipment from a world-class manufacturing facility are encouraged to sign up as registered bidders, view, and bid on the available lots at www.EquipmentAuction.com.

About EquipmentAuction.com, LLC: 

EquipmentAuction.com is an online equipment auction mediation company that provides a marketplace for machinery & equipment buyers and sellers. Through its sister company, Equipment Appraisal Services, the company also provides machinery and equipment appraisals for accounting, banking, and legal purposes for both public and private companies. For more information about EquipmentAuction.com, please visit www.EquipmentAuction.com. For more information about Equipment Appraisal Services, please visit www.EquipmentAppraisal.com.