A construction company has to spend a good sum of money to buy heavy equipment and when it comes to sell the machine, they just can’t afford to sell in scrap value. They will certainly want a good sales value for the item. However, the most important question is how can one come to the conclusion and determine the price of the machine after that being used for let’s say a couple of years. It will be very difficult to decide the correct price of the machine after all the wear and tear it has to undergo, completing projects after projects.
Let us begin this with a scenario. For instance, you advertise for selling equipment on an online auction site and have stated that you have used the machine for 4 years and it is in good order. Due to some reason, you do not see anybody bidding on your item. You try to look for bidders bidding for the same machine posted by other seller and you find that they are placing successful bids. It rattles your mind pondering why anybody isn’t bidding on your item. To your astonishment, you find out that the starting price that you have placed on the equipment is way high than other sellers. Well, in this entire scenario, you as a seller were doing one terrible mistake. You never bothered to find out the correct price of the item and wanted the starting price of the auction that was not acceptable to buyers.
This one big mistake of yours takes the entire listing for a toss and you make nothing. What you could have done to avoid such a situation is appointing an appraiser who would appraise the price of the item and could inform you the correct price of the item after depreciating its price. It is quite obvious that you can’t put the same price that you paid to buy the equipment and have to depreciate its price for the wear and tear it undergoes to complete your projects.
Other than selling the machine, appraisal of equipment is also done for insurance purposes. You can’t have the insured amount for the equipment same throughout. As years pass, the insured amount decreases. However, if you appraise the equipment, the appraiser will check the equipment and will pass a certificate indicating the correct value of the item. Just in case, your equipment undergoes an accident, you can claim the insured amount as per the appraised value.
It is imperative to appraise the equipment from a certified appraiser. You simply can’t approach to anybody who does not hold a valid certificate to appraise your item; it will simply be a waste of time and money. His appraisal will not hold any good and when you’ll be shown the door if you approach the insurance company to settle any claim. There are many companies who do construction equipment appraisals. You may check about these companies from the people involved in your business and get your machine appraised or can even explore the internet to get this done.