Agricultural, in a global economy, is very much a business and as such should be treated as one. Whether you are purchasing or selling, a reliable appraisal of the agricultural equipment and machinery is essential. Many banks, lending institutions, and insurance companies require an appraisal by a professional, certified appraiser. Additionally, agricultural equipment appraisals can be useful or often required for:
- property tax appeals
- estate settlements
- litigation/ disputes
- gifting and donations
- financing collateral
- divorce and/or partnership dissolutions
- marriages/ pre-nuptial agreements
- and more
The fair market value of the equipment or machinery is the goal. The fair market value of the equipment is typically estimated for an asset that is going to be in continued use. However, keep in mind that equipment is not all that an agricultural appraiser can be looking at. Farms and livestock operations, timber properties, crops, vineyards, orchards, and even buildings on the property can also be appraised.
Two types of appraisals can be done; an on-site investigation or a desk-top value. Most institutions require the on-site appraisal, but sometimes, depending on the value of the equipment, a desk-top estimate is acceptable. An on-site appraisal consists of a certified agricultural/farm appraiser going to the location of the equipment to have first-hand knowledge in gathering all the details needed.
Typically, photos are taken, options are discussed, pieces are checked out, and a value can be determined based on fair market value. Depending on who is hiring the appraiser and the reason, this is not always an option. The second type is the desk-top appraisal, which is simply information on the equipment that is based on current value and market trends.