2017 EAANA 27th Annual Membership Meeting

Fair Market Value What the H*ll Is This?Presented byStephen C. Stabiner

Heath IndustrialAppraisal Services, Inc.

Market Value (Fair Market Value)A professional opinion of the estimated most probable price expressed in terms of cash in U.S. dollars to be realized for property in an exchange between a willing buyer and a willing seller, with equity to both, neither being under any compulsion to buy or sell, and both parties fully aware of all relevant facts as of the effective date of this appraisal report.(Definition Source‐AMEA)

Fool Proof ValuationsI have a fool proof method of always coming up with the correct value.

Hey, who’s to say what’s right or wrong?

Can anyone tell me the difference between fair market and liquidation value? 

In English?

My Three Most Requested Appraisal Values

B. Orderly Liquidation Value

C. Fair Market Value

A. Forced Liquidation Value 

A. Forced Liquidation ValueMy most popular, since the majority of the appraisals are for 

financial in situations and the one value that has public records, but not always accurate records. (The information is only as good as what is “reliably” reported). 

I have seen machines sold at auction, only to appear on the auctioneers’ website the following week under the orderly liquidation heading.

How accurate is reported auction sale information?

Reported 6/1/2016 Screen Shot Retrieved 1/14/2017

B. Orderly Liquidation ValueTheoretically, higher than forced, but how dependable is the  

available information?

Mounds of info on the web as far as what dealers and/or individuals (EBay, MachineTools.com) are asking for their equipment but…………

What does it actually sell for?

C. Fair Market ValueHigher / more than both Forced and Orderly Liquidation values, 

in theory.

How high is high? How much more is more? Less than new cost? How much less?

Can’t we make it easy and just use a straight percentage?

Case #1 – Assignment FLV, OLV, FMVDoosan 5‐Axis Model Puma 3100 ULY CNC Turning Center, S/N 

ML0124‐000097 (New 2012), 33.5” Swing, 16.5” Turning Diameter, 123” Center Distance, with Live Tooling, C‐Axis, 3‐Jaw & 4‐Jaw Chucks, Tailstock,SMW‐Autoblok Steady Rest, Follow Rest, 4.5” Hole thru Spindle, LNS Turbo Chip Conveyor, Doosan/Fanuc Oi Series Control

Case #1 – Assignment FLV, OLV, FMV Forced Liquidation Value ‐ $140,000.00 (No comp available – Too new)

Orderly Liquidation Value ‐ $175,000.00

Fair Market Value ‐ ???

Case #1 – Assignment FLV, OLV, FMV Comp – Dealer Quote on Sister Machine DOOSAN PUMA 3100 ULY CNC TURNING CENTER 

STOCK/REFERENCE #: T3804Year 2012Serial Number ML 0124‐0000106 (9 numbers different from 

machine appraised)Control Fanuc 0iTDNumber of Axis 5Chuck Size 15"Swing 33.5"Turning Diameter 16.5"Center Distance 123"Bar Capacity 4"X‐Axis Travel 11.5“Z‐Axis Travel 125.6"

Y‐Axis (Y/N) YX‐Axis Rapid Feedrate

1,181 IPM

Z‐Axis Rapid Feedrate

1,181 IPM

Spindle Speed 3,000 RPMMain Motor 25/30 HorsepowerLive Milling (Y/N) YC‐Axis (Y/N) YTurret Capacity 12Tailstock (Y/N) YMachine Hours 2,924 Cutting 

Case #1 – Assignment FLV, OLV, FMV Equipped With:

SMW SLU3.1Z Hydraulic Steady RestProgrammable TailstockTool PresetterX-Axis ScaleBarfeed InterfaceCoolJet Thru Turret OptionTool Monitoring(2) Live Tool Holders (1 Radial/1 Axial)(4) Static Tool HoldersChip Conveyor

Price$189,000 USD 

Less 5% for Dealer Resale.Dealer Willing to Net

$180,000 or possibly less…

Fair Market Value ?

$190,000.00

Case #2 – Assignment FMVHyundai Model WIA KH80G CNC Pallet Changing Horizontal 

Machining Center, S/N G3701‐0509 (New 2016)

49.2” X‐Axis Travel 1° Table Indexing Chip Conveyor

39.4” Y‐Axis Travel 80 Station Automatic Tool Changer

Renishaw TS27R Tool Touch Probe

33.5” Z‐Axis Travel High Pressure Coolant thru Spindle

Renishaw OMP60 Spindle Touch Probe

(2) 31.5” x 31.5” Pallet Changing Tables

Nanocan C1L‐751 Automatic Liquid Temperature Regulator

Siemens 840D Control

Case #2 – Assignment FMVNew Cost……………$395,000.00 Invoice Dated 7/02/2015In my research, I was offered thismodel machine available as new for: $310,889.00Also in my research, was offered the model smaller (KH-63G) 24.8”X24.8”, Manufactured 2014, Installed 2015, 90 Tools in the magazine, not many running hours for: $225,000.00

Fair Market Value ? $280,000.00

I digress for a minute These multi‐pallet systems can become very sophisticated. Last year, I 

appraised a system consisting of: 6 – Makino Horizontal Machining Centers Married Together with a 108 ‐ Position (Pallets) 3 Layer (Levels) 5 Load Cells Flexible Automated 

Material Handling System, New in 2013 $700,000.00 Cost I appraised the machining centers separately as well as the handling system

Case #3 – Assignment FLV, OLV, FMVLandis 14” x 168” Type C Plain Hydraulic Cylindrical Grinder, 

S/N 25710 (New 1940s), with Motorized Work Head, Follow Rests, Paper Coolant Filter SystemForced Liquidation Value - $ 4,500.00 (Close auction comp available)

Orderly Liquidation Value - $ 24,000.00 (Dealer comp available for sister machine)

Fair Market Value ? $30,000.00

Taken from the internet –Conflict of Interest?

Conflict of Interest #1Elgin, IL Antique DealerAntiques & Oddities

For all your antique dealer needs, call the experts of Antiques & Oddities of Elgin, IL. We are a purveyor of fine arts and antiques. We buy unique items at all times, whether it is a single piece or an entire estate.

We guarantee fair market value appraisals for your antique items.

Has anyone guaranteed an appraisal or been asked?

Conflict of Interest #2"We always price them at the fair market value, what the pieces are selling for on the secondary market today," says Adam Trunoske, a specialist in Sotheby's design department.

"We never include an effect for what provenance will have, and provenance is key.”

Conflict of Interest #3Imagine if your first-ever appraisal was fair market value.