For long-standing assets like machines, you probably already know that appraisals may need to happen more than once. But what is an appraisal anyway? How do they work, and what do they tell you? Here at MidSouth Auctions & Appraisals, we’re happy to answer your questions. Let’s dive right in!

Definitions

An appraisal is an educated look at something’s potential value, based on current market conditions and the skill of the appraiser. An appraisal works by tallying up information about the asset to make an estimate. Though the end result is simply a number – the expected value of the asset in question – an appraisal is no easy feat.

What’s In An Asset

When appraising an asset, one important question to ask is: what are similar assets selling for in the expected market? While by no means an all-in-one value, it can be helpful to consider. Just don’t read into it too much; always consider multiple sources when appraising an asset. Two given machines of the exact same type, model, year, and make might sell for vastly different prices, and there are plenty of factors to think about as to why. In the face of this overwhelming disparity, one strategy is patterns. It’s well known that human brains are good at pattern recognition; time to put that tendency to use! If you can find a pattern, it may help to value your equipment.

Looking from multiple perspectives is another helpful exercise. If you think back to what you originally paid, then consider the wear it’s gotten and the time since you bought it, that may help with appraisals as well. Determining what you think is a reasonable useful life for your machine is another good idea. Contacting your local equipment vendor is also a commendable choice of action.
Next, consider the specific premise you’re measuring around. If you’re in a hurry to turn an asset into cash or simply don’t have much time to sell it, you’ll likely end up measuring differently than if, say, you were selling that asset as part of a bigger transaction and the new owner is taking over some or all of the operation.

We recommend having an experienced appraiser assist you throughout the process. If we have a location near you, perhaps consider giving us a call.