Frank Buis, head of appraisals and managing partner of NTAB, explains in this article the importance of an independent appraisal and consulting firm in establishing a value. An independent appraiser sets an accurate valuation; neither too high nor too low. Frank has been in the appraisal and auction business for more than 30 years, which has given him a wealth of experience.
For any transaction, whether inside or outside of bankruptcy, a valuation for a merger or acquisition project, a concerned party seeks an independent appraisal of value. Thus, the position of a pledgee is treated the same as a creditor who has a claim against any estate. For a valuation, an outside expert with expertise is brought in. It is desirable that this person has certification to demonstrate their knowledge and is not involved with a trading or auction house to ensure independence.
Today, many appraisal companies are directly or indirectly affiliated with auction companies. This used to occur because auction proceeds were not available to third parties. As a result, desired historical yield information was not available for an accurate valuation. In today’s digital age, the closed source of information of the past is easily made public. Almost all auction proceeds from industrial auctions can be made available with the right technology. You can also combine this “auction data” with other public sources such as trading sites.
The advice of an independent appraiser
Thus, an appraiser can now give a reliable and independent appraisal with his experience, knowledge and skill, supplemented by this data. Last but not least, an appraisal determined solely by the value of the appraised property.
The above sounds logical, yet it is not. The independent appraiser determines the value without self-interest and advises the client on this value and other peripheral factors. He is not guided by the pressure of a possible future auction or sale transaction of the appraised properties. This raises the question of whether an auction in a particular case is the best choice to achieve the highest yield. An independent appraiser will also advise on the various sales methods available, where an auction may well be a good option. But a private sale or even an on-site sale can sometimes be better advice. This is how the client and all stakeholders are best served, from content.
Today, many appraisal companies are directly or indirectly affiliated with auction companies. This used to occur because auction proceeds were not available to third parties. As a result, desired historical yield information was not available for an accurate valuation. In today’s digital age, the closed source of information of the past is easily made public. Almost all auction proceeds from industrial auctions can be made available with the right technology. You can also combine this “auction data” with other public sources such as trading sites.
Independent valuation in any industry
As an independent valuation and consulting firm, NTAB performs appraisals of the following assets:
- Machinery and business inventory in all possible industries
- Transportation Equipment
- Inventories (finished goods, semi-finished goods, raw materials, residuals, etc.)
- Debtors
- Work in progress portfolios
- Business properties and spaces
- Registered property (ships & aircraft)
