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Why Price and Value Are Two Very Different Things

May 16, 2012

When you arrange to have a CMEA perform an appraisal of your equipment or machinery, what they’ll eventually present to you is what they believe to be the value of the equipment. This value is based on many factors, including the age of the equipment, the condition, and so forth. That’s why value has such a wide range. There are so many variables to account for.

So logically, once you know the value of your equipment, you know the selling price, right? Not necessarily.

Remember that equipment may not have value for one business or facility, but may be invaluable to another. One company might be willing to pay a lot for your equipment — irrespective of its age or condition — because it will improve that company’s manufacturing process. Another company might lowball their offer because the equipment might help them, but not in any sort of game-changing way.

Still, an appraisal report is extremely important. Why? Because it gives you written proof of the value of what you have. It gives you a starting point when the time comes to sell. And if you need to make a case for the price point you choose, you’ve got a professional’s opinion, and therefore, justification.

The NEBB Institute endorses and strives to observe the highest standards of professional ethics to preserve the public trust inherent in the professional appraisal practice. The Institute provides initial and monthly comprehensive education, ongoing support, and a dynamic international network, and certifies professionals in the art of machinery/equipment appraisal and brokerage.

By: NEBB Institute

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