Private sale might pay off – or cost you big time.
When it’s time to sell equipment, private sale is often the first, or “go to” choice for many people. If all goes well, the selling process can be quick and painless, and the seller gets the price they want. Unfortunately, that scenario is usually the exception, not the rule. With so many moving parts in the sales process – from listing your equipment to dealing with potential buyers – it can easily get derailed. But regardless of whether the selling experience is a smooth ride or a bumpy road, the real risks remain. Here are some to keep in mind:
Time risk – the clock is ticking
Often sellers are in a time crunch. It could be self-imposed or external – there are jobs coming up, a location move, money is needed elsewhere in your business, or the bank is waiting on payments. Either way, sellers can find themselves facing a ticking clock and risk running it down without selling, as there’s no guarantee of a sale date when selling privately. You’re at the mercy of the markets and buyers, and if money is still owed on your machines, the bank’s deadlines for loan or financing repayments.
When you sell with Ritchie Bros. or IronPlanet, you have peace-of-mind knowing that you’ll get not only certainty of sale, but a fixed date of that sale, and you’ll have your funds within 15 business days.
Personal liability – the blame game
One risk of private sale that’s often overlooked revolves around liability. If your equipment is on your property, and in the process of inspecting and testing it out a potential buyer injures themselves, someone else or someone else’s property, you could be held liable. In the best case scenario, most businesses would have insurance to cover something like that, but regardless, dealing with an insurance company is likely a headache and hassle you don’t need. And in the worst case, someone could decide to pursue an injury or property claim against you through legal channels.
One way to avoid this risk is to sell through a company who offers storage on their property. Ritchie Bros. Auctioneers equipment yards are secure and staffed, and there’s no charge for pre-sale storage. The other route is to make sure there’s enough info, photos and/or video online so potential buyers don’t have to inspect your machine in person. If you sell with IronPlanet or via Marketplace-E, buyers can see equipment details via the online listing, as well as detailed inspection reports backed by IronClad Assurance® equipment certification.
Financial risk – deal collapses and bouncing checks
The biggest risk in selling privately, of course, is the financial one – specifically the risk of not getting paid. This can simply take the form of a buyer backing out at the last moment or disappearing altogether before the deal is closed. The more serious risk is the actual transaction going awry, and after the equipment’s changed hands, the money doesn’t. And with heavy equipment worth significant amounts of money, it’s doubtful you’ll be able to ask for a cash payment to avoid bouncing cheques or fraud of some sort.
When you sell via Ritchie Bros., IronPlanet, or Marketplace-E, we handle the transactions and payments, so you can be sure you’ll get your money. If you do decide to sell privately, we offer a service called PurchaseSafe™ Secure Transaction Management, where we handle the invoicing, lien searches, payout coordination, sales documentation, escrow services and taxation.
If you have used equipment or trucks to sell, talk to the experts at Ritchie Bros. We help thousands of customers sell safely and securely every year.
For more information, talk to your Ritchie Bros. representative
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