If you are a contractor preparing to purchase heavy construction equipment, you need to understand the importance of getting that equipment appraised. Not only will the appraisal be a vital piece of information for obtaining an asset-based loan, it will also to let you know the condition of the equipment before you make the investment. If you are looking at getting crane appraisals, here are three things you will need to remember.

Credibility

In order to get a reliable, accurate, and ethical appraisal report, the appraisal company you use should belong to either the Association of Equipment and Machinery Appraisers (AEMA) or the American Society of Appraisers (ASA). Members of either society must demonstrate their proficiency through testing and continuing education which helps add quality to the appraisals they give. It is also a good idea for the appraisal company you use to be a Certified Equipment Appraiser (CEA) and also have Uniform Standards of Professional Appraisal Practice (USPAP) certification.

Comprehensive Reports

The appraisal company you use should be able to supply you with a comprehensive appraisal report containing the following bits of information about the crane or cranes you are wanting to purchase:

• A clear description of the crane that has been appraised
• A total dollar value of the crane that has been appraised
• A certification page that has been signed and sealed along with a certificate of value page
• A statement of the methodology used to obtain the appraisal
• A statement that defines the purpose of the appraisal report

These comprehensive appraisal reports are necessary as your lender will need to look them over before approving the equipment loan.

Value Types

There are different types of values used when appraising cranes and other pieces of heavy equipment that you will need to understand. Following are some of those value types:

• Fair Market Value - an opinion of how much money would change hands between the buyer and seller
• Forced Liquidation Value - an opinion of how much a piece of equipment would sell for at an advertised public auction
• New Replacement Cost Value - the current cost of a similar piece of equipment with the same specifications and of equal quality

It should be noted that all of the above value types are the appraisal company's professional opinion and that all value types are expressed in terms of money.

By finding a credible appraisal company, knowing what should be included in an appraisal report, and understanding the different value types, you will know you are getting a fair appraisal. To learn more, contact a company like Roden Consulting LLC