Intricacies of Correct Valuations
Appraisals typically begin with a cost approach. If you had to replace the equipment today with an identical model, how much would it be? Next, there is the consideration of how much you would be willing to pay for a piece of machinery in the class of equipment you are having appraised. Also, there is a discussion of depreciation, which includes the need for repairs and the number of machine hours the unit brings to the table.
From there, an experienced professional will seek out comparable sales in the primary and secondary markets. There, the valuation will take into consideration whether an item is sold at auction or through a third party. Due to the significant price disparity of the secondary market, the expert will also factor in adjustments for transportation, assembly, and storage fees.
In some cases, you may not want an appraisal to be based on the replacement cost. Instead, you want to know if a trade of unequal asset classes should be undertaken. This is a tricky approach because it does not allow you to compare apples to apples. For example, you might consider the replacement cost of a new piece of equipment that you then compare to the forced liquidation value of machinery that falls into a different category.
Would it make sense for you to undergo this type of trade? While the actual cash value will offer some insight into the transaction's merit, it might be a better option to look at the fair market value in use. Because this can be markedly different from the historical cost, remember to consult with a specialist who can help you make sense of the numbers.
On the other side of the equation are the clients who want to begin their appraisal and valuation process with a sales comparison approach. Rather than working immediately with a cost model, you might feel more comfortable with honing in on the depreciation of the equipment. A simple ownership discount can make the difference between buying a functional piece of used equipment at a top dollar and getting a great deal on a new listing instead.
Capitalize on the Extensive Experience of an Authority in the Field of Heavy Machinery
Appraisals and Valuations
Work with someone who knows a PF5510 Blaw Knox paver from a PF161 model. When you are thinking of parting with your classic construction equipment, you expect to get top dollar for a 1943 Caterpillar dozer. Similarly, you want to sell your 2007 Hooklift truck for the maximum that the market will bear – preferably six figures.
It makes sense that this level of expertise only comes from handling transactions that involve asphalt equipment, attachments, agricultural equipment, and concrete machinery. Once you find the specialist who can weigh in on drill rigs with the same expertise as he can bring to a valuation of log skidders, you know that you have found the expert for your firm.
This is someone who can assist you today while looking at Mack brand trucks and tomorrow when considering Ingersoll Rand equipment. Not a one-trick-pony, this specialist will advise you on purchases, offer insights into positioning your asset inventory for maximum buying power, and highlight excellent buying and selling opportunities for any type of marine or dry-land equipment.
