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CHOOSING A MACHINERY & EQUIPMENT APPRAISER
a published and media distributed article
by Randy Stewart, ASA
AAI Associates, Hartland, WI
Locate a professionally accredited appraiser before disclosing any
confidential or sensitive information. Ask other types of appraisers
for references if necessary. Verify that the professional designation
is the result of testing and other significant criteria, and requires
continuing education. The designation is evidence that the appraiser
is a professional and serious about his profession. Some non-professional
appraisers provide this service only as a sideline or part time, and
are limited in scope regarding valuation theory and methodology. Avoid
an appraiser who implies advocacy, or who bases his fee on contingencies
such as percent of value or outcome of transaction, as these are normally
considered unethical within the profession.
Define the appraisal question, property to be appraised, premise of value, how the appraisal will
be used, possible implications to third parties, etc. A competent and accredited appraiser will
maintain a professionally confidential relationship, so do not withhold information. If the
appraiser is well informed, he should be able to provide a firm quotation and proposal prior to
engagement.
Ask for a copy of his/her qualifications, looking for evidence of professionalism and experience
in valuation. It is not always important that the appraiser have a track record with the specific
industry or type of equipment, since his expertise is in valuation of machinery and equipment
in general, not within a narrow specialization. It is not necessary to know how to repair or
operate the equipment to estimate its value. It is possible that an estimate of value will be more
objectively obtained if the appraiser must investigate the current market, versus using only his
limited personal and possibly out-dated experience. However, an appraiser holding a
professional designation within an area of specialty is advantageous, since the academic as well
as technical aspects will be united. This would apply to such areas as aircraft, maritime, classic
autos, etc.
Watch for and avoid the possibility of a conflict of interest. As an example, a used equipment
dealer who might have a subject property owner as a present or potential customer may not be
the best choice for an impartial opinion of value. A liquidator serving as an appraiser
"guaranteeing" his appraisal could tend to be overly conservative due to anticipation of profiting
from a future sale.
Until relatively recently, the public had to rely on tradespeople for appraisals of machinery and
equipment on smaller scales (smaller businesses), since the professional machinery and
equipment appraisers were mostly employed by large appraisal firms dealing with large projects.
But there is presently a growing trend toward adding education to the experience, resulting in
the availability of professionalism within this area of lesser "exotic" property appraisal. The
leader of this emphasis has been the American Society of Appraisers, offering college courses
and degrees, on-going educational seminars and programs, providing professional accreditation
and designations to those qualified. They will help you in your search at (800) ASA-VALU,
or web site www.appraisers.org.
AAI Associates providing Machinery and Equipment
Appraisers and Machinery and Equipment Appraisal, serving Wisconsin,
Minnesota, Iowa, Illinois and Michigan as well as nationally or internationally.
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