Why Appraisals Are so Important Before Auctions
Auctions are a great way to get rid of surplus inventory of any kind, including machinery, equipment and personal property. Not only are you able to sell your assets in bulk rather than individually, but you also get your money in cash and all in one go. Auctions are great if you wish to save your business time, effort and money.
What goes hand in hand with auctions? Appraisals. If you’re looking to find the right price for your assets in Toronto, consider professional auction appraisers to help you. Certified reviews work for any kind of item at the manufacturing, wholesale or retail level. Appraisers will offer an analysis of the and assets with an accurate overview, leading to recommendations that will suit your needs.
Read on to find out why appraisals are essential pre-auction.
Appraisals Are Detailed
Many buyers and sellers often find that they lack information about their assets, even if they do own them. The history, functionality, capability and of course, the item’s current state, greatly impacts its saleability. So a proper appraisal is a necessary step for any business looking to liquidate.
Be sure to refer to a certified appraiser only. Professionals in the industry will do a site visit after an initial consultation which will help assess your fixed assets and your currently held inventory. Their age, condition, functional and economic obsolescence, as well as other properties, will be determined. Certified appraisers will then perform a thorough analysis of the necessary management and inventory reports. Pricing information is reviewed after referencing multiple sources such as equipment journals, online publications, used equipment dealers and the company’s own auction and liquidation archives.
This completes the auction appraisal process in Toronto. You will then receive a full report of the appraisal process covering the estimated value of your fixed assets and inventory. Factors such as market conditions, timing and technological issues and trends are considered to provide you with the full picture of what your assets are worth. As you can see, auction appraisal is an extremely thorough process that fully evaluates your items and gives you a leg-up in the competition to sell your bids.
Appraisals Methods Can Be Personalized
There are also many kinds of appraisal methods, such as:
1. Liquidated sale value
This refers to the estimated amount of money that could be generated from selling assets in a public auction. To arrive at the estimated amount, appraisers usually evaluate the condition of the assets, their specialization, marketability, appearance and psychological appeal. Most auctioneers are also well-versed in the auction business and are able to estimate the number of bidders likely to attend the event. Assuming that the items are sold ‘as is’ and that the buyer is responsible for transportation of the items, as well as any bundle deals, the appraiser is able to arrive at the exact amount it would take to sell the items immediately.
2. Liquidated sale value in place
This method is used if a facility failed to be sold intact. The estimated proceeds of the sale would then have to be recalculated.
3. Net auction sale value
This is similar to a liquidated sale value but with the added conditions that the assets must be sold within three months and that they must be professionally appraised before the actual sale. This appraisal method also takes into account the expenses of running the auction.
4. Orderly liquidated value
This value refers to the estimated gross proceeds of a sale within a six-month time period. Within the given time frame, the seller is expected to find a buyer who will transport the items which are sold on an ‘as-is’ basis.
5. Net orderly liquidation value
When a facility is not in operation but the owner does not want to sell just yet, the net orderly liquidation value refers to the net total that could potentially be obtained if the items were sold. Similar clauses on the items’ condition and buyers’ responsibilities apply but within a five-month time period.
6. Fair market value
This is the net proceeds that could be obtained by the sale of an asset between a willing buyer and seller. In this case, the buyer is given the time and opportunity to conduct background research and do their due diligence.
Appraisals Are Beneficial to The Buyer and Seller
Now, let’s look at the main benefits of conducting an auction appraisal in Toronto. There are numerous advantages in choosing to liquidate with the help of an appraiser:
1. Identify the genuine make
Often sellers want to sell their items at a high price but this is dependent on the make and functionality of the asset. Certified appraisers can verify the brand and manufacturer accurately which can fetch a fair price for the seller.
2. Logistics and planning
When you consult with an appraisal company, they will manage all the auction logistics for you. The flow of the auction, as well as potential customer interest, can be managed. They usually have a vast network of interested clients so they can ensure a varied customer base who might be interested in all the different kinds of assets you might sell.
3. Seller reputation
An appraisal will determine the value of your assets, as well as the net profits that can be generated for them. In evaluating the items, appraisers will ensure your items are sold at the right price for you as well as the buyer. This will raise seller transparency and gain you a reputation as a trusted seller which will be beneficial for future auctions as well.
Be sure to work only with the most trusted and reliable auction appraisers in Toronto. At Michaels Global Trading, our team of certified appraisers has been working in the auction business for a long time and can help you liquidate your assets at the best price.
If you would like to know more about equipment appraisals in Toronto, call Michaels Global Trading today at 888-471-5066 or contact us here.