What is an Appraisal?
There seem to be more and more opportunities to take items to an Appraisal Fair, Appraisal Day or other venue and have someone look at it and give you a value.
The question is, when you have attended one of these have you gotten an appraisal? The answer to this question is “maybe”. Quite a bit has changed since I originally wrote this article several years ago so an update is definitely in order.
In my article “Are your appraiser’s credentials real?” I discuss credentialing of appraisers. I discuss that, unlike real estate appraisers who must be licensed by the state, there are no such requirements for licensing of personal property appraisers so how do you know that the person giving you an appraisal is qualified to do so? One of the best ways is to verify that your appraiser is credentialed by one of the major personal property appraisal organizations and that they follow the requirements of the Uniform Standards of Professional Appraisal Practice (USPAP).
All members of the International Society of Appraisers (ISA), of which I am one, are required to develop and transmit their appraisals in conformance with USPAP so when the USPAP rules change so do we. USPAP defines an appraisal as an opinion of value. ISA ads “or cost” since we are often asked to estimate replacement cost for insurance purposes. Consultation, on the other hand, is the act of forming a non-monetary opinion. USPAP also comments that an appraisal must be numerically expressed as a specific amount, a range of numbers or as a relationship (e.g. not more than, not less than).
The question of “what is an appraisal?”, particularly pertaining to appraisal fairs, came from the USPAP’s requirement that appraisals be transmitted as a written document. This left appraisers who wanted to abide by USPAP but were often asked to participate in appraisal fairs in a quandary. It led to the creation of the term “Verbal Approximation of Value”. If an ISA appraiser wanted to do appraisal fairs they would have the customer read a document that said they were getting a verbal approximation of value “which was not an appraisal because of limited research opportunity and the report was not in writing”. This was not a very satisfying solution. After much discussion between the members of the Appraisal Standards Board (the governing body responsible for USPAP) and representatives of the various appraisal organizations USPAP declared that the transmission of an appraisal result could being writing, as a digital file or verbally. They said, you are giving an opinion of value while acting as an appraiser therefore an ISA appraiser is required to comply with all the requirements of USPAP including explaining the objective, the approach to value and the intended use as well as keeping a work file.
So, when might you want a verbal appraisal as opposed to a written one. There are really quite a few circumstances. The most important consideration is what is the intended use of the appraisal? You certainly need a written report if you are donating something and need a value for a tax deduction. If you are going to use the values for obtaining insurance coverage or for filing a damage claim. Anything that might be used in a court case such as a divorce settlement. All these would need a written report. However, if you are pricing items for a garage sale or want to know what might need an appraisal and what does not or you need a walk-thru just for equitable distribution. Part of the appraiser’s job is to help determine what you need in light of what your intended use is and to recommend the most economical approach that meets your needs.
So, is what you are getting at an appraisal fair an appraisal? The answer is yes. Is it being done in compliance with accepted appraisal guidelines and methodology? That depends on the appraiser.
For a more detailed discussion see “Why do I Need an Appraisal?”
For a discussion on different types of value see “How can there be Different Values for a Single Object?”
For more information, contact:
Michael Logan via email or
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Charlotte, FL, Sarasota, FL, Fort Myers, FL, Naples, FL and all of SW Fl