Archive for the ‘Equipment Auctions’ Category
The Importance of an Unbiased Third-Party Opinion
To derive a proper opinion of value, no matter what the situation, getting an appraisal performed by an unbiased third party, such as a certified appraiser, is always the best course of action. To be unbiased, the professional developing the opinion of value should not have any vested interest or participation in the opinion of value.
For example, many auction companies advertise that they perform appraisal services when in most cases, their primary business is the performance of an auction and not being an independent appraisal entity. Oftentimes, an auction company will perform an appraisal in lieu of obtaining a certified equipment appraisal as part of an agreement to list and sell the property. However, because the auction company potentially has a vested interest in the outcome of the auction, their appraisal is not unbiased, which could result in an inaccurate estimation of value.
Another example we can look at is how large lending institutions perform and order valuations. The Small Business Administration requires lenders to obtain third-party valuations so there is no appearance of collusion between the appraiser and lender. Furthermore, if the valuation was not properly defined and constructed, this could affect a borrower’s ability to obtain financing for purchase or sale situations, or jeopardize buyouts, refinancing, buy/sell agreements, and anything pertaining to the value of the assets.
Make sure that your equipment appraiser is an independent third party who can truly act and perform in an unbiased manner so that the appraisal meets the requirements of financial institutions, government agencies, buyers and sellers, shareholders, and partners, and so that you really know what it’s all worth.
By: Present Value
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Machinery and Equipment Auctions
Earlier this month, a major industrial auctioneer sold more than 3,600 heavy equipment pieces at a two-day auction held in Texas, proving that there is a strong demand for heavy machinery and equipment. Nearly 3,000 people from 41 different countries bid in person or registered to bid for items online during the event. Online bidders were big purchasers and took home 23% of the equipment that was for sale. Read about the auction in this article titled, “Demand for Heavy Equipment Remains Strong.”
We’ve written many times in the past about online and in-person auctions, the reasons to conduct an auction, the steps to take to prepare for one, the different types of values given to items up for auction, and Present Value’s ability to offer the service. Given this recent proof that demand for auctioned equipment is high, we decided to revisit the subject.
When a business fails or is asked to leave a property, often the business owner will decide to hold an auction with the goal of quickly selling equipment for as high a profit as possible. Present Value can represent companies in these situations through the whole transaction. Our appraisers will provide companies with the three values of the equipment – liquidation, forced liquidation, and fair market – and facilitate the auction process, which will be conducted by one of the two auction houses with which we partner.
By: Present Value
Tavern on the Green Auction
Earlier this year, Tavern on the Green, that iconic New York restaurant, announced that it is going to close its doors. Many who had a first date there, proposed there, or celebrated a special occasion there were saddened by the loss of this place full of memories. But other restaurant owners, or those sentimental ones among us, can own a piece of Tavern on the Green because it is holding a multiple-day auction in January 2010.
We’ve written about auctions in the past and their trend to move online. Tavern on the Green’s auction is no exception. The company is going to hold an in-person auction in January, but it also will have an online auction going on in tandem. That way, people who want to own a piece of New York history, but can’t make the trip can bid on their favorite pieces.
If your company is in a similar situation to Tavern on the Green’s, contact Present Value, and we will appraise your assets and facilitate the auction process for you.
By: Present Value
Present Value: More than an Appraisal Firm
Following up on our press release that went out on Tuesday, December 8, 2009, we’d like to focus a little bit more on some of the characteristics that make Present Value a unique full-service appraisal firm.
While lenders and business owners have many choices when it comes to finding an appraisal company, at Present Value, we pride ourselves on being more than just a company that provides appraisals: we act as a trusted resource for lenders and business owners. We can act as consultants to help guide our clients as they make crucial business decisions, whether it be a lender, looking to conduct pre-loan due diligence or auction assets from a loan default, or a business owner, looking to obtain financing or make an acquisition.
In addition to providing appraisal services, Present Value has the expertise and experience to orchestrate other aspects of these deals. The strength of our services comes from the partnerships that we have developed all across the country. We have the capabilities to bring the right people to the table for whatever our clients’ needs may be, such as auctioneer services or brokerage services. We aim to be problem-solvers for each and every one of our clients, helping them make well-informed business decisions.
Present Value prides itself on its turnkey service offerings, and Present Value is happy to act as a resource for its clients as they cope with past mistakes and look toward improving their processes. Our network of professionals will always deliver the highest quality products, backed by a team of experts in their individual market segments.
By: Present Value
Auction Value: Fair Market Value
We’re continuing our discussion of the three different types of value a certified appraiser will provide before a company auctions off its assets. Read the other posts on this topic here.
Fair market value (FMV) is the estimated potential value of equipment and machinery if it were sold in an open market. The following assumptions are made when determining FMV:
- Both the buyer and the seller are willing and knowledgeable about the asset, and neither party is being forced into the transaction.
- The market is open and accessible by many buyers and sellers.
- All rights and benefits attributable to the asset are included in the sale.
Additional factors are considered when assessing FMV: the cost or selling price of the item, sales of comparable assets, replacement costs, and expert opinions. FMV can be somewhat subjective because it is based on the circumstances of place and time, and the availability of sales data for comparable machinery or equipment.
This concludes our series of posts on the three types of asset values that a business should know prior to an auction. Understanding the three types of asset value that should be provided by an appraiser can help a business set appropriate price ranges at auction and receive the highest possible profit from auction sales.
By: Present Value
Auction Value: Forced Liquidation
In this post, we’re continuing our discussion of the three different types of value a certified appraiser will provide before a company auctions off its assets. Read the first two posts here and here. Today, we’ll tackle the topic of forced liquidation value.
Forced liquidation value assumes that a seller is being forced to sell his machinery, equipment, and other assets and wouldn’t be doing so if circumstances weren’t dire. Forced liquidation value is also known as auction value and implies a diminished sales value because of buyers taking advantage of a seller compelled to go to auction. The forced liquidation value of a company’s assets will always be lower than the fair market value.
An appraiser settles on an asset’s forced liquidation value by determining the fair market value and then judging the price for which the goods will most likely sell if there is not enough time to collect an adequate number of bids in an auction.
By: Present Value
Auction Value: Orderly Liquidation
In last week’s blog, we began a discussion about the three different types of value that a certified appraiser will provide prior to a company auctioning off its assets. In this blog, we will address the first type, orderly liquidation value.
A liquidation value is the estimated amount of money a company’s assets could quickly be sold for if the company went out of business. In a normal, growing industry that shows profit, a company’s liquidation value would be much less than the share price. In an unprofitable or shrinking industry, the liquidation value would likely exceed the share price. Though not always the case, if the liquidation value exceeds the share price, the company will go out of business.
The orderly liquidation value is based on the idea that a company can afford to sell off its assets to the highest bidder. It assumes an orderly sale process in which the seller can take a reasonable amount of time to sell each asset in its appropriate season and through channels of sale and distribution that fetch the highest reasonable price.
In the next blogs, we will examine forced liquidation value and fair market value.
By: Present Value
Know the Value of Your Machinery and Equipment Before an Auction
While the economy is showing signs of improvement, there are still a number of companies that are being forced to close their doors, which in many cases includes liquidating their equipment and machinery assets. Oftentimes, the most quick, efficient way to do this is through auction.
When considering an auction, a company should first contact an appraiser in order to get a sense of the value of its equipment and/or machinery. In a previous post on equipment auctions, we discussed the role of appraisers in the auction process. In this and the next few posts, we will cover more detail about the three different types of value that a certified appraiser will provide prior to an auction – orderly liquidation value, forced liquidation value, and fair market value.
It is important to understand various ways that a business’ equipment will be valued in the marketplace in order to set appropriate price ranges at auction and receive the highest possible profit from the auction sales.
By: Present Value
Equipment Auctions
Companies may consider equipment auctions when they are asked to leave a rental property and can’t afford to move their equipment from the space, or if the business simply fails for any number of other reasons. The goal of an equipment auction is for the struggling or failing company to quickly sell off equipment with as high a profit as possible.
The first step a company considering an equipment auction should take is to have its equipment appraised by an equipment and machinery appraiser. An appraiser will give that company three different values of its equipment – the orderly liquidation value, the forced liquidation value, and the fair market value – so that the company will have an idea of how much money it could get for its equipment at auction. After the company knows these values, it can contact an auction house. The auction house will send an e-mail blast to interested buyers and make sure that they are aware of the equipment that is up for sale for 45 days prior to the scheduled auction. Then, the live auction takes place at the facility.
In recent years, online auctions have increased in popularity. Incorporating online auctions with live auctions provides significant benefits to both buyers and sellers. Buyers can find the equipment they need without being limited by geography, and sellers have a convenient way to access a larger pool of buyers.
If you are considering an equipment auction, contact Present Value. Present Value’s certified appraisers will represent you throughout the entire transaction. They will tell you the liquidation, forced liquidation, and fair market values of your equipment, and then put you in touch with one of the two auction houses with which the company works.
By: Present Value
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