Prepare for Your Equipment Appraisal or Pay “Stupid Tax” – Part 1

How to Prepare for Your Equipment Appraisal or Pay “Stupid Tax” – Part 1

This is a quick guide to preparing for an Appraisal so you do not have to pay “Stupid Tax” in other words extra money because you made a mistake. First, for more information visit our website at Expert Equipment Appraisal. We have prepared a Free 1 page Equipment Appraisal Cheat Sheet for you and a in depth 20 page eBook that will give you the edge you need when dealing with an Appraisal.

In today’s Banking and Business Buy / Sell environment many times you will need an Appraisal. With that in mind here are a few of the primary things you should know.

Define your need & choose your appraisal value (There are 12 total—these are the most used)

  • Fair Market In Continued Use—Highest values based on market data, includes adjusted install and tweak in costs.
  • Orderly Liquidation—Price you will receive selling your equipment over time to an interested buyer, Mid Value Range
  • Forced Liquidation—Commonly referred to as Auction Value—Lowest Market Based Value
  • Scrap—How much is it worth based on weight.
  • Your Need will define the value you want your equipment to come in at: Low, Mid, or High Values

Prepare your Asset / Depreciation / Equipment List
Create your own “Perfect Asset List” with the following components to make sure you receive the highest values possible for your equipment.  Don’t leave this to an “Appraiser” that may be an Accountant or Auctioneer in disguise that has never seen your type of equipment before.  Make sure you give an asset list that specifically describes every piece of equipment with the following: Make, Model, S/N, Age, Condition, New Cost, Specifications, Options, & Hours / Miles.  We find that this one thing will make sure that an “Appraiser” will not miss that $10,000 option your specific machine has.

Interviewing the Appraiser—Questions to Ask

1. Are you Certified? By who? Do they test? What Designations do you hold?

2. What is your Appraisal Education background? What experience do you have with my type of equipment?

3. Can you meet my deadlines? How long will the process take?

4. Are you USPAP Compliant?

5. What Approach to value do you take and is it documented?

6. What values can I expect to receive? (Fair Market, Orderly, Etc.)

7. How do you charge and what are your fees?

A Certified & Professional Appraiser will easily be able to answer these questions and more.

Tip: 99% of Auctioneers, Dealers, and Accountants are NOT CERTIFIED!

To Learn More about:

  • Negotiating the Fee!
  • What Appraisers Actually do!
  • And 11 Secrets of Appraisers
  • Also—A deeper understanding of the topics discussed in this guide

in our Next Issue: The Quick Do’s and Don’t of a Site Visit

Nathan Bazzle, CMEA CSBA – Author of “Secrets of the Machinery Appraisal Industry – A Blueprint to saving Time and Money”