Quickly get to Your Next Step with our World-Class Equipment and Machinery Appraisals

Simple Steps to Start an Equipment Appraisal:

Please Call us with any questions through this guide. We have seen and worked through most issues or nuances you have – and we can help.

A little prework will save you many hours and potentially thousands of dollars…

Step 1: Determine Specifically What Needs Appraised.

Step 2: The Asset List (Appraiser vs In-house)

Step 3: Getting a Quote for the Appraisal

Expectation: What does an equipment appraisal cost?

Step 1: Determine Specifically What Needs Appraised.

Start this step by reviewing your need for the Appraisal. The reason for the Appraisal dictates what items need to be Appraised. This may seem like its obvious, but the details can drastically cost you.  Some examples of what we mean…

Example 1: Buying or Selling Your Business – The Seller wants to capture as much value as possible and will want to make sure ALL equipment, Ancillary Items, Furniture and Fixtures, and Electronics are included.  The Buyer is looking for the main operations equipment and support equipment with little value given to the list except to verify existence and condition. Alternately… there are a million ways to negotiate a deal and we have seen everything from every screw counted in the appraisal to only Major items above $25,000 counted in the Appraisal.

Example 2: Loan, Financing – There are major differences on the equipment appraisal requests we see from Lenders. Imagine a Lender trying to reach a specific collateral level – they will want everything plus the kitchen sink appraised. But, if the loan is going to be a SBA or USDA loan the lender may only need items above $2,500 appraised. 

Every Type of Reason for an Appraisal may require different equipment to be appraised – Call us if you have questions.

Step 2: The Asset List.

Should You have the Appraiser come Onsite to collect the data or collect the data In-house?

This step is also determined by the reason for the appraisal.

If you are going to court (Bankruptcy, Divorce, Lawsuit, Etc.) you will want the appraiser to come Onsite and collect the data themselves. This creates a stronger defense in the courtroom as they have “Visually Inspected / Verified” the equipment.

Another situation for Onsite data collection is the lack of good data or asset lists. You can’t send an appraiser a list of equipment that says, “Green Truck” and expect good values.

Here is the type of data a “Perfect Asset List” will include:

  • General Item / Property Name – Example: Bulldozer, Computer, Address of Property, General Description of Improvement, Etc.
  • Location of Item or Property – (If Applicable or if Item is not onsite – add into Description Box)
  • Make of Item – Caterpillar, Jeep, Etc.
  • Model of Item –  Example: D-11, Gladiator, Etc.
  • Year of Item – Year the Equipment was Manufactured
  • Description – Includes – Serial Number, Vin Number, Miles, Hours, General Description, Specifications, and Options Included
  • Year of Purchase –
  • Cost to Purchase –
  • Current Depreciation Amount – (Not needed by us but good for you to have)
  • Item Tag / Internal Asset Number – (If Applicable put into the Type / # Column)
  • General Specifications – I.E. Size, Weight, Specifications, Options (Add into the Description Column)

Remember that More Information is Better

Step 3: Getting a quote for an equipment appraisal.

Lets talk about the cost of an equipment appraisal.

We have a saying “The Most Expensive Equipment Appraisal is the 2nd one, because the 1st one was unusable”

So much money has been wasted on bad appraisals it’s infuriating. Most of the time the blame is on the appraiser not fully understanding or working with the client to accomplish the CLIENTS goals.

 

So here is a quick list of “Best Practices” when getting an Equipment & Machinery Appraisal.

 

Verify the Appraiser is Certified or Accredited in “Equipment / Machinery Appraisal”.

This is not a place to go for the lowest bid, a buddy, a mechanic, or a general appraiser.  You need a person who will understand the market for the equipment and who can write a report that will be accepted by Lenders, Courts, Government Agencies, and other professionals who may need access. Also, you need an appraiser willing to be an expert witness if needed – we have had done some many “2nd” reports simply because the original appraiser refused to be an expert witness after the fact.

 

What information should you send for the best quote.

Talk to Your appraiser… Here at Next Step Appraisal, we treat every quote conversation as if there is a signed NDA in place (many times there actually is a signed NDA).

 

To give the best quote of Price and Time we need the following.

  • Quantity of Items. (Depreciation Schedule, Asset List, Estimate, Etc.)
  • Location(s) of items. (This allows a true estimate of potential Onsite travel and time).
  • When is the report due. (We can handle RUSH jobs when needed)
  • Will the report need us to be Expert Witnesses in Court. (All jobs have the potential, but it helps in planning if you know)
  • Any specific Issues with Onsite Collection. (Equipment is on the EX-Spouses land, its 2 miles back in a flooded coal mine, it’s on the Space Station, It’s in Singapore on an offshore oil rig, etc. – yes these have all happened…)
  • All parties involved. We always need to check our database for client conflicts. This makes sure we are not accidentally hired by both sides (unless that is clearly stated and agreed to by all parties). It is surprising how many times both sides of the appraisal (example: a Buyer and Seller or both of the Ex-Spouses) have tried to hire us.

Expectation: What does an Equipment Appraisal Cost?

Most Certified or Accredited Appraisers can give you a free quote when you supply them with the items from Step 3. Here are some of the fee structures we have encountered and have used. Remember, in a litigation / Court situation, you will almost always need an Onsite visit for the appraiser to be a good Expert Witness.

 

Hourly – Definitely the most expensive – Hourly costs range just like an attorney – we have seen $50 to $150 (ours) to $250 and up. When we are in a setting with no information, we generally try to gauge based on a half day rate of $600 and that seems average. So, for instance I need to visit your shop (1/2 day), research your Equipment (full day), write the report (1/2 day) – You would have a $2400 appraisal. Based on the National average, we have seen appraisals run about $2900 – $3500 with lows in the $800 range and highs in the Hundreds of Thousands.

 

By the Item – Most Appraisers will quote or at least consider how many items they specifically must research and report on. Some different government agencies can be used for a guide here. The IRS hints at (but never outright says) equipment valued at $2500 and up should have its own line item in the appraisal. The SBA and USDA mention both $2,500 and $5,000 and up. Items below this amount fall into Ancillary & Support, FF&E, or Electronics and are generally appraised in bulk with industry depreciation metrics. We have seen the per item cost range from $35 to $250. A good national average may be $75 – $100 in the Midwest and $95 to $125 on the coasts. Also expect discounts for higher quantities of items being appraised – we give a range of discounts at 25, 50, 100, 500, and 1000 items.

 

Flat Rate – The appraiser takes everything into consideration and quotes a flat rate fee. If you have followed our steps above and give good data, this is the way we prefer to quote as its most fair for everyone.

 

Note 1: Remember that preparation for court, depositions, and actual court time are generally billed separately. Small fees for an Expert Witness can reap HUGE rewards.

Note 2: An Appraisal must be paid for BEFORE or AT the time of delivery to be considered unbiased. This eliminates the other side from saying you held any sway over the appraisers’ values by withholding money.

Managing Partners
Master Certified Equipment Appraisers
Certified Senior Business Analysts
Business Alchemists'

Nathan & Amanda Bazzle

Nathan & Amanda pair up to bring the most to your Equipment Appraisal or Asset Management Needs. We have found that having two minds looking at the situation is better than one, this is most evident in on-site appraisals, research, and report review. Our team is focused on bringing you the best report available.  

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