Appraisals
Guide to obtaining an appraisal
Make an Educated Choice, There's Too Much at Stake
Whenever there's a question about the value of your personal property, there's also a risk involved. It may be
the risk of selling too low, or of paying too much; the risk of being under or over insured; the risk of not
getting your fair share in a division of property; the risk of incurring tax penalties or being audited when
claiming a deduction for a charitable contribution or when calculating estate taxes. A professional appraiser helps
you manage these and other such risks by providing a written opinion of value upon which you can base your financial
decisions. Rather than being just an "Educated Guess", the professional appraiser's value conclusions are based on
prescribed methods of evaluation, research, and report writing. Bankers, financiers, investors, insurers, adjusters,
estate managers, trustees, executors, attorneys, judges, federal and state tax agencies - All are dependent upon the
knowledge and expertise of the appraiser, and so are you. Too often and too late, people find out that the appraisals
they have are inaccurate or misleading, resulting not only in greater risk to themselves, but also in an annual waste
of millions of consumer dollars.
ISA Training Makes an Important Difference to You!
The International Society of Appraisers trains appraisers with the most comprehensive personal property appraisal educational programs in America. An ISA-educated appraiser is well equipped to give you an accurate and complete appraisal that will stand up in court, if necessary. The foundation of ISA's Appraiser Education Program is its courses on Appraisal Principles and Procedures of the Certified Appraiser of Personal Property (CAPP) program, comprising:
1.Core Course 101:
Appraisal Principles and Business Practice
2.Core Course 102:
Appraisal Ethics, ISA Report Writing Standards, Uniform Standards of Professional Appraisal Practice (USPAP), Identification and
Authentication, market and Value Research and Analysis, Legal Issues.
3.Core Course 103:
Practical Appraisal Report Writing Additional specialty courses are available. A person enters the
ISA as an Associate Member. upon completing and passing the three core courses, and with three years related experience, the Associate
member earns Accredited Member status, and may use the initials "ISA" after his or her name. This educational program forms the basis
for further study and special assignments that lead to certification.
Seven Questions to Ask When Hiring an Appraiser
What qualifies you to appraise my property?
A qualified appraiser has formal education in appraisal theory, principles, procedures, ethics, and law. The appraiser should be up to date on
the latest appraisal standards. Continuing education and testing are the only ways to ensure this competence. The appraiser you hire should
be familiar with the type of property you want appraised and know how to value it correctly. Expertise on a particular type of property is not
enough if the "expert" does not know how to evaluate an item for its appropriate worth. Without appraisal training, these "experts" have no
way of understanding the complicated variety of marketplace definitions that are used to determine appropriate values for appropriate uses.
For example, a museum curator may be able to authenticate a work of art, or a jeweler may be able to determine the identity of a gemstone,
but neither may be able to value those items correctly unless they follow appropriate appraisal principles and procedures.
Do all appraisers have similar qualifications?
No! In most states anyone can claim to be a personal appraiser, whether
they have had formal training or not. Until legislation is passed to protect the public from the unqualified appraiser, the burden is on
the consumer to evaluate an appraiser's credentials. it is important to ask the prospective appraiser what type of formal appraisal
education training he or she has received. Obtaining a copy of the appraiser's professional profile or resume can help you evaluate the
appraiser's credentials.
Do you belong to an appraisal society that tests its members?
There are many appraisal organizations, but only a few require
members to take courses and pass tests before being admitted as "accredited" members. ISA is such an organization. Membership in an
appraisal association 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 a code of ethics and conduct.
Have you been tested? Do you take continuing education classes?
If the appraiser claims membership in a group that trains and
test its members, be sure to ask if this appraiser has personally gone through the training and testing. Some organizations have
grandfathered members into higher member status without testing them. 'Grandfathering' means allowing members to retain their titles and
status if they joined before new rules or testing standards were required, ISA has an absolute non-grandfathering policy. Continuing
education is also important for appraisers. Procedures and regulations are always changing. Because of this, ISA constantly updates,
expands and re-writes its courses to ensure that its members will perform the work you need with knowledge of all the latest professional
standards.
How will you handle items which may be outside your specialty area?
No appraiser should claim expertise in everything.
ISA recognizes over 135 areas of specialty knowledge. A good appraiser knows his or her limits, and is expected to consult with other
experts when necessary.
What is your fee and on what basis do you charge?
DO NOT hire an appraiser who charges a percentage
of the appraised value, or charges a "contingency" fee. These practices are clearly conflicts of interests, and may result in biased
values. The IRS will not accept an appraisal done with such fee arrangements. ISA appraisers are prohibited by their Code of Ethics from
charging a fee based on a percentage of the value of the property appraised. Hourly fees, flat rates, or per item charges are acceptable.
What will the appraisal report be like?
You should receive a formal, typewritten report that gives you the information you need
in a complete organized way. Some appraisal societies only teach appraisal theory, with no 'real life' examples. ISA is the only major
appraisal society in the United States that specifically trains its members in how to write standardized, comprehensive appraisal reports.
Each accredited member has been tested on these standards.
A Competent Appraisal Report Has:
a cover document explaining
in detail what type of value is being sought ("purpose") and how the appraisal is to be used ("function" or "assigned use".) the
methodology and resources relied upon, including market analysis and market(s) selected. a complete and accurate description of the
property written in such a manner that it can be identified without photos. the date(s) and location of inspection, and the effective date
of value. a statement by the appraiser that he or she has no financial interest in the property, or that such interest is disclosed in the
report. the appraiser's qualifications and signature. DO NOT Accept An Appraisal If:
It is handwritten or unsigned: The fee is
based on a contingency or upon the value of the property. the appropriate "purpose" and "assigned use" are not stated. the item is beyond
the appraiser's expertise the appraiser is not willing and able to defend it in court (subject to the appraiser's availability, and
separate fee arrangement). |
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