Machinery Appraisals
A value opinion is only useful when the purpose and definition of value are clear.
Sterling can provide market-based machinery evaluations for sale planning and discuss formal appraisal needs for lenders, estates, insurance, accounting, legal matters and other assignments.
What you should know
- Sale evaluation versus formal appraisal
- Fair market, orderly liquidation and forced liquidation concepts
- Machine identity, condition and market research
- Desktop review or physical inspection as agreed
Direct answer
A machinery evaluation estimates likely market positioning for a potential sale. A formal appraisal is a documented assignment prepared for a stated client, intended use, effective date, value definition, scope and assumptions. Tell Sterling why the value is needed before requesting “an appraisal,” because the correct work product depends on the purpose.
Common reasons machinery value is needed
Sale
Auction or disposition planning
Estimate market interest, identify anchor assets and compare auction, cash purchase, consignment and package-sale strategies.
Finance
Lending and collateral review
Support a lender, borrower or secured party with an agreed scope, asset identification and clearly defined value premise.
Legal
Estate, divorce, dispute or insolvency
Assignments may require a specific effective date, ownership assumptions, legal instructions and an independent professional standard.
Insurance
Coverage and loss planning
Insurance purposes may use replacement cost or another definition that is very different from resale or liquidation value.
Accounting
Allocation and reporting
Financial reporting or purchase-price allocation can require specialists, accounting guidance and documentation beyond an ordinary machinery-market evaluation.
Management
Internal asset decisions
Support capital replacement, consolidation, plant moves, surplus declarations and make-versus-sell decisions.
Value terms are not interchangeable
| Value concept | General idea | Important caution |
|---|---|---|
| Fair market value | A hypothetical exchange between informed, willing parties under stated conditions and without undue compulsion. | The exact definition and market level must be stated in the assignment. |
| Orderly liquidation value | Expected gross value under an orderly sale with reasonable exposure time, as specifically defined. | Expenses and net proceeds may be outside the value unless expressly included. |
| Forced liquidation value | Expected value under a compressed sale period and compelled conditions, as defined. | Time pressure and limited exposure can materially reduce value. |
| Replacement cost | Cost to replace utility or capacity, sometimes new and sometimes adjusted for depreciation. | Not the same as used-market resale value. |
| Auction estimate | A sale-planning range based on expected competitive bidding under proposed conditions. | Not a guarantee and not automatically a formal appraisal. |
What improves appraisal reliability
- A complete asset list with unique identifiers and accurate locations.
- Manufacturer, model, serial number, year, capacity, control and major options.
- Clear photos, operating status, known condition, maintenance and service records.
- Included tooling, attachments, support systems and software-transfer limitations.
- Ownership, liens, leases and excluded property.
- The intended user, intended use, effective date, required value definition and reporting deadline.
Desktop review versus physical inspection
A desktop evaluation relies on information provided by the client and available market research. It may be efficient for early planning, but it cannot independently confirm physical condition, configuration or even the existence of every listed asset.
A physical inspection improves identification and condition observations. The final scope should state what was inspected, what was not, what information came from others and which extraordinary assumptions or limiting conditions apply.
Related auction resources
Use these pages to continue without starting over.
Frequently asked questions
Is a free machinery evaluation the same as a formal appraisal?
No. A free evaluation is generally for potential sale planning. A formal appraisal has a defined client, intended use, effective date, value definition, scope, assumptions and report requirements.
Can Sterling appraise one machine?
Yes, subject to the purpose and scope. For an ordinary potential sale, a market evaluation may be more appropriate and economical than a formal report.
Do you guarantee the machine will sell for the appraised value?
No. An appraisal or estimate is an opinion under stated assumptions, not a guaranteed sale result. Actual prices depend on the market and sale conditions.
Can an appraisal be backdated?
A retrospective effective date may be possible when sufficient reliable information exists, but the assignment must be clearly defined and the available evidence may limit the conclusion.
Should my lender or attorney define the assignment?
Usually yes. Ask the intended user what standard, value premise, effective date, asset scope and report format they require before work begins.
Ready to review your machinery sale?
Request a free machinery evaluation before choosing auction, cash purchase, consignment, private sale, competitive bidding, ongoing surplus sale or complete liquidation.
