FAQ
What is an auction?
Merriam-Webster: Auction: a sale of property to the highest bidder.
Wikipedia: An auction is usually a process of buying and selling goods or services by offering them up for bids, taking bids, and then selling the item to the highest bidder or buying the item from the lowest bidder.
Yes, there are many different types of auctions. The auctions which are predominantly conducted by Equipment Marketers & Appraisers are presented in three different categories.
- Live auction: A live auction if often referred to as a traditional auction. This is where the merchandise is being sold at the seller’s site. There is a traditional auctioneer, bid calling or “chanting”, the bid and the ask. Members of the audience are the bidders. The bidders signify their bid to the auctioneer. When the bidding has concluded, the auctioneer “drops the hammer” or in any customary manner to say sold, and marks the item sold to the highest bidder.
- Live Virtual Auction: Similar to the live traditional auction except all the bidding is procured over the internet. The bidding audience is not at the location of the assets. The auctioneer is heard broadcasting “like a radio show” over the bidding platform. Bids are procured by various webcast providers. The bidder clicks a bid button to signify a bid.
- Online or Timed Auction: The traditional auctioneer is not utilized. Software is 100% in control. Bidding participants register and place all bids by using the appropriate bidding platform. Items being sold can be located anywhere.
What is an appraisal?
An appraisal is an opinion of value.
FAIR MARKET VALUE – An opinion expressed in terms of money, at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts, as of a specific date.
FAIR MARKET VALUE – Installed – An opinion, expressed in terms of money, at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts, considering market conditions for the asset being valued, independent of earnings generated by the business in which the property is or will be installed, as of a specific date.
FAIR MARKET VALUE – Removed – An opinion, expressed in terms of money, at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts, considering removal of the property to another location, as of a specific date.
FAIR MARKET VALUE IN CONTINUED USE WITH AN EARNINGS ANALYSIS – An opinion, expressed in terms of money, at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts, as of a specific date and supported by the earnings of the business.
FAIR MARKET VALUE IN CONTINUED USE WITH ASSUMED EARNINGS – An opinion, expressed in terms of money, at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts, as of a specific date and assuming that the business earnings support the value reported, without verification.
FORCED LIQUIDATION VALUE (Auction) – An opinion of the gross amount, expressed in terms of money, that typically could be realized from a properly advertised and conducted public auction, with the seller being compelled to sell with a sense of immediacy on an as-is, where-is basis, as of a specific date.
LIQUIDATION VALUE IN PLACE – An opinion of the gross amount, expressed in terms of money that typically could be realized from a properly advertised transaction, with the seller being compelled to sell, as of a specific date, for a failed, non-operating facility, assuming that the entire facility is sold intact.
ORDERLY LIQUIDATION VALUE - An opinion of the gross amount, expressed in terms of money, that typically could be realized from a liquidation sale, given a reasonable period of time to find a purchaser (or purchasers), with the seller being compelled to sell on an as-is, where-is basis, as of a specific date.
REPLACEMENT COST NEW – The current cost of a similar new property having the nearest equivalent utility as the property being appraised, as of a specific date.
REPRODUCTION COST NEW – The cost of reproducing a new replica of a property on the basis of current prices with the same or closely similar materials, as of a specific date.
SALVAGE VALUE – An opinion of the amount, expressed in terms of money that may be expected for the whole property or a component of the whole property that is retired from service for possible use elsewhere, as of a specific date.
SCRAP VALUE – an opinion of the amount, expressed in terms of money that could be realized for the property if it were sold for its material content, not for a productive use, as of a specific date.