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Appraisal Services
When we are contacted by a financial institution or company to provide a quote on an appraisal, we consider the following points:
- Location of assets: are they grouped in one location, or will travel be required to view all the assets?
- Type of assets: are there many similar pieces, or is every piece different? What is the mix between large assets (e.g. excavators) and small assets (e.g. air compressors)?
- Customer assistance: will the customer have a knowledgeable person available to assist our field appraiser and provide information on recent repairs and upgrades?
- Unique assets: do we have the expertise required to appraise unusual pieces?
Terms of Engagement
Our fee is $2,750 (local currency) per appraiser, per day, plus any expenses incurred such as accommodation, car rental or travel costs, film development, mileage, etc.. This rate will be charged in USD, CAD and EURO depending on the jurisdiction of the job.
We require a signed letter of engagement before starting any appraisal.
Field Work
Upon engagement and once the initial coordinating and appointments have been made, a Ritchie Bros. Auctioneers appraiser will be dispatched to the identified locations. All our representatives have undergone thorough training in appraisal procedures and standardized equipment descriptions. This ensures that like assets are described in a consistent and accurate way.
We update and review these procedures and equipment standards on a regular basis.
A field inspection consists of the following:
- Physical inspection of each available piece.
- Full description of the unit, including year, make, and model. Years are verified against in-house databases that in most cases represent the best information available from the particular manufacturer.
- Recording and verifying the serial number or vehicle identification number.
- Recording the hour meter or odometer reading.
- Recording features, attachments and upgrades that enhance the value of the unit dramatically and/or are optional for that manufacturer and model.
- Recording condition of the unit (i.e. unused, like new, very good, good, fair, poor).
- Recording undercarriage or tire condition.
- Recording any owner’s identification number.
- Taking photographs of the equipment.
At times, certain items may not be available for inspection (for example, the machine may be working at a remote site). These items are evaluated on a best-effort basis, either using like items that have been inspected, or information provided by the owner. These items are described as “Not Viewed”
Ritchie Bros. Auctioneers reserves the right to decline providing a valuation on “Not Viewed” items or on unique items that we do not feel qualified to evaluate.
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Valuation
Once the field inspector has reviewed his descriptions and correlated them to the photographs, the data is entered into our proprietary appraisal system. The appraisal inspector and several senior valuation analysts, working independently, then assign values to each item based on the data and photos collected from the field.
Our methodology utilizes a sales comparison approach (also referred to as Market Approach). When establishing a value, we draw on the following resources:
- An electronic database of auction results from Ritchie Bros. auctions conducted over the last 15 years.
- The personal experience that our representatives have accumulated from many years of conducting unreserved auctions.
- World and local economic conditions and pricing of new models currently being sold at dealerships and elsewhere.
Because we have several valuation analysts price the equipment, our appraisals also incorporate an averaging process. Many of our field staff have developed expertise in particular market niches; if the appraisal includes specialized equipment, we will also have one of these individuals place values on the assets. This method ensures that the final value reflects both the local and global markets.
Completion
Once the valuation process has been completed, a bound presentation package is prepared. A schedule lists all the units individually in a format that merges text and color photos (when available) together in a standard order. The package includes an assessment of the condition of each piece and its valuation.
We also include our completion letter, which sets out the total appraised value for the equipment listed on the attached schedule.
Turnaround Time
Production of the final appraisal document typically takes approximately 20 working days from the date the appraisal is entered into our system. This preparation period can vary and Ritchie Bros. will ensure every effort is made to meet your specific needs.
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