Appraisals Are Important and an Arizona Controversy Proves It
This week, there’s an article in The Arizona Republic about an auction that was held in Arizona recently. A town in Arizona purchased equipment, land, and right-of-way from a dairy farm in 2009 with plans to turn the land into a park. Controversy arose when it was discovered that the town paid nearly 10 times the market value of the assets. The reason for this was that the town never asked that an appraisal be performed on the land, buildings on the land, or the dairy farm equipment. The town instead paid full replacement value on the land, structures, and machinery and equipment.
The town held an auction with much of the farm’s dairy equipment on the block to repay some of the debt remaining after the sale. The proceeds were originally intended to improve the town’s roads.
This example and the ensuing controversy show the importance of an appraisal. If one had been performed by an experienced appraiser, the town wouldn’t have faced such controversy, and the people in the town would have new roads to enjoy, which are now unaffordable.
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