Questions to Ask an Appraiser

Questions clients might ask the appraiser

It is common for the would-be client to have several questions regarding the appraisal process. More and more frequently, however, the client will also have questions about the appraiser’s qualifications to provide the services being requested. Following are several questions clients often ask followed by related comments.

1. What Qualifies You to Appraise Personal Property?

Product knowledge (area of expertise), while critical, needs to be coupled with knowledge about the theory, principles, methodology and standards of appraising. Many “experts” can identify every detail of an object, but they do not know the appraisal methodology that must be employed to properly develop an opinion of value.

These “experts” have no way of understanding the various and complicated marketplace definitions which are used to establish appropriate values for the given assignment. For example, a long-time art dealer may be able to authenticate a work of art, but, lacking appraisal education and training, he or she could not properly develop an opinion of value for that work of art according to proper appraisal principles, methodology and standards.

Formal education embracing appraisal standards which consists of appraisal theory, principles, practices, methodology, procedures, ethics, standards and report writing is essential. The science of properly developing an opinion of value and reporting the results of an appraisal assignment require ongoing study.

2. Do All Appraisers Have Similar Qualifications?

No! Unlike real property appraisers, there are no state, provincial or federal licensing requirements for personal property appraisers. It is the consumer’s obligation to determine if the appraiser he or she hires is qualified to appraise items for the stated intended use of the report. Most people who hold themselves out to be appraisers may be familiar with local auction prices for everyday items but are ignorant of regional, national or international markets for antiques, collectibles and art.

3. Do You Belong to an Appraisal Organization?

Membership in an organization is important because it shows that the appraiser is involved with the profession, has peer recognition, has access to updated information, and is subject to codes of ethics and conduct and, therefore, is answerable to someone. However, organizational membership is an important question only if the appraiser’s organization requires adherence to codes of ethics and conduct, provides quality educational opportunities, and has rigid requirements for advancement and continued membership.

4. How Many Years of Appraisal Experience Do you Have?

This is a good question when used in its proper perspective, i.e., this question only has validity after the appraiser has convinced the client that he or she has earned appraisal competence in the core fundamentals and standards through education and testing.

Doing a job longer than someone else doesn’t mean one is doing it better. One can repeat mistakes for years. This type of person may have experience, but not expertise. Appraisers need both!

In the U.S., federal regulations require that appraisals meeting strict criteria be performed only by qualified appraisers. Changing legislation, strict IRS procedures, and severe penalties for under- or over-valuations for both the taxpayer and the appraiser make it essential that only knowledgeable and qualified appraisers be used for all federal-related appraisal purposes.

5. Do You Use Consulting Specialists?

The appraiser should go to other sources for information when necessary. An antiques dealer may not be qualified to appraise machinery or residential contents just as a jeweler may not be qualified to appraise clocks or silver. No appraiser can know the value of everything, even in their own specialty, without research and/or consultation with others.

6. Do You Supply References?

The appraiser has an obligation of confidentiality to all clients. However, the appraiser should supply the client with his or her curricula vitae and, upon request, with the names of clients after securing their written permission to do so.

7. Are Your Appraisals Written to Any Particular Professional Standards?

Professional appraisers write their appraisals in compliance with their societal standards as well as to the Uniforms Standards of Professional Appraisal Practice (USPAP) as promulgated by The Appraisal Foundation of Washington, DC. Note that USPAP is the only generally accepted standard for appraisers in the US.

8. What Should I Expect for My Money?

The client should receive the services of an educated appraisal expert who will provide a USPAP-compliant report (including the appraiser-signed USPAP certification statement) which the appraiser should be willing to defend in court. The appraisal should include any limiting conditions encountered or extraordinary assumptions made, the appraiser’s qualifications, a statement of the appraiser’s disinterest in the items being appraised, a complete and accurate description of the items, the methodology and resources relied upon, market analysis and the market(s) selected, and well-defined value conclusions.

9. What is Your Fee, and on What Basis Do You Charge?

Clients should recognize only fees that are based on a contract price or on an hourly rate (plus expenses (such as travel, research, photographs, outside consultations, etc.) where appropriate.) Fees that are based on a percentage of the appraised amount or on a contingency (e.g., a fee based on a percentage of the tax savings resulting from a donation for which the appraisal was done) are considered unethical and are prohibited by USPAP.