Machinery and equipment appraisers are some of the loneliest folks in town. They don’t evaluate real estate, they don’t do Antiques Roadshows, and they don’t establish the value of entire businesses. What they do is appraisals of heavy equipment. Stuff like construction equipment, the machinery used to make automotive products, chemical processing equipment, waste water treatment facilities, wire and cable machines, printing presses, office equipment, mainframe computers, agricultural equipment — you get the picture.
Change Makes the Phone Ring The machinery and equipment appraiser’s phone usually doesn’t ring until change is in the wind. After all, when you buy a barnfull of new tractors, you know what they’re worth. You just paid the bill. So you won’t be looking for an appraisal until you’re ready to auction your old tractors to raise cash for the new ones. Or you’re dissolving your partnership — or your marriage — and need to establish fair market value for the split. Or maybe your company’s gone bankrupt and the judge orders an appraisal to determine liquidation value for the creditors. Or the IRS takes you to court for back taxes and insists on a USPAP appraisal of your assets. Or you’re trying to get business insurance and the insurer needs to know the insurance value or replacement cost of the equipment.
Inhouse Experts Upstage Independents. While there are many reasons why a company might need a machinery and equipment appraisal, the need doesn’t arise often, and when it does, it is sometimes satisfied by experts employed by banks, insurance companies, auction houses, and accounting firms. So the independent machinery and equipment appraiser can be a mighty lonely dude.
Professional Organizations Help Independents. Of course, there are successful independent machinery and equipment appraisers. Two of them are Bernie Sencer of Sencer Appraisal Associates and Jim Tonkinson of Tonkinson Appraisals. Bernie and Jim, both past Presidents of the American Society of Appraisers’ Long Island Chapter, say the key to success is active membership in professional organizations. Bernie is also active in the Appraisers Association of America; Jim in the Association of Machinery & Equipment Appraisers. When I asked each what was so great about professional organizations, Bernie said “Accreditation” and Jim said “Networking.”
Accreditation. Bernie explained that anybody — literally anybody — can hang out a shingle and claim to be a machinery and equipment appraiser. That’s because there are no Federal or State licensing boards for this appraisal discipline, as there are for real estate appraisers. If you’re looking for a machinery and equipment appraiser, your only assurance of competence, training, ethical compliance, and professional standards is to look for an appraiser accredited by a professional organization, such as the ASA. To earn the coveted Accredited Senior Appraiser designation, Bernie and Jim had to agree to the ASA’s code of ethics, undergo training and pass tests in their specialty, work with a master appraiser, obtain USPAP credentials, and be an ASA member for five years. Oh yes, and get recertified every five years. Big difference from “hanging out a shingle!”
Networking. Of course, Jim agrees with Bernie about accreditation, but he adds that the opportunities for business networking with professionals is important too. Although machinery and equipment appraisers appear to have nothing in common with personal property appraisers, the fact is that clients who order an appraisal of residential contents (personal property appraisal) to settle an estate are often the same professionals who order an appraisal of production machinery owned by the decedent. Clearly, this logic applies to insurance brokers, bankers, the IRS, probate judges, etc. as common clients. Jim says sharing contacts and client information with other professionals in an organization helps keep the phone ringing. He says, “It also helps to learn the basic of making and sharing contacts, so books like Andrea R. Nierenberg’s Nonstop Networking: How to Improve Your Life, Luck, and Career can be very useful.” Even more helpful are successful business networking groups, such as Biz@Net in Northern New Jersey.
Appraisal Websites. Bernie and Jim remind me to remind you that having a website that works is also necessary if you plan to make a living as a machinery and equipment appraiser. They suggest I toot my own horn. Toot. Visit my Webshop to learn more about successful websites for appraisers. And visit our ValTalk Appraisal Forum to continue the discussion on appraising machinery and equipment.