While some appraisals can be made for under $1,000, a typical equipment appraisal costs many thousands of dollars. The cost of an equipment appraisal depends on many factors, including: the intended use of the appraisal, the research that will be necessary, the number of equipment appraised, whether or not it requires a field inspection, and the speed in which it needs to be completed.
An equipment appraiser’s fee can either be paid based on the actual time spent appraising, or priced as a fixed fee.
In the case of an hourly engagement, the appraiser will provide an estimate of how much time the appraisal will require. The actual time spent can vary from the estimate depending on the accessibility of the equipment for the field inspection and unforeseen complications.
In many cases, the appraiser will provide a fixed-rate quote. They will base this on the amount of time they expect to spend on the appraisal. The benefit to you is that you will not be caught with a surprisingly high bill at the end.
If the equipment appraisal requires travel, the appraiser might charge you a fixed fee for travel or actual costs.
The intended use of the appraisal impacts cost
It might seem like an appraisal is an appraisal and that it doesn’t matter what you use it for. However, the level of research and documentation can depend on how the appraisal is going to be used.
For example, if the appraisal is for IRS purposes related to a donation, the appraiser will have to follow certain guidelines handed down by the IRS.
A good way to think about this is to look at real property appraisals (as opposed to personal property appraisals like equipment). If you ask a real estate agent how much your home is worth, they can do some quick analysis and provide you with a ballpark.
But that valuation can’t be used to get a bank loan. A real estate appraiser will have to substantially more work and provide additional documentation in order to provide an appraisal that can be used for a loan.
Some equipment appraisals require more research
The amount of research necessary to appraise equipment depends on how readily available the data are.
If you need a common John Deere tractor model appraised and there’s an active reseller market for these tractors, it will be fairly easy for the appraiser to do his or her research.
If you have a rare piece of medical equipment, the appraiser might need to call the manufacturer, contact hospital equipment buyers, etc. in order to determine the value.
More equipment equals more cost
This goes without saying, but the more equipment you have to appraise, the more expensive your appraisal will be. Some appraisal are only of one item. In other cases, you might require the appraiser to appraise a warehouse full of equipment.
However, an appraisal with five items does not necessarily cost five times as much as an appraisal with 1 item. There can be some economies to scale in appraising, in particular as it relates to report production and only paying the appraiser for one trip to view the equipment.
Field appraisals cost more than desktop appraisals
A field appraisal involves an on-site inspection of the property. This often involves travel expenses and more time than a desktop appraisal that does not include a physical inspection of the property.
An urgent appraisal might cost more
In some cases, a need for a fast turnaround on appraisal might mean paying more. This is especially true when an appraiser needs to make last-minute travel plans because of the increased cost of such travel. Also, the appraiser might have to postpone other commitments in order to complete the appraisal faster, and they might require more money to do this.