LAUREN TRAVIS
An appraisal is a written or verbal opinion of value based on facts and determined by a qualified appraiser.
The reason that an appraisal is being sought can determine what type of appraisal is needed in order to answer your valuation questions. The type of value that you need determines how the appraiser proceeds and which appraisal rules apply.
Examples of appraisal needs might include valuing personal property to obtain insurance coverage, file a damage claim, determine equitable distribution in divorce or estate planning, determining the value of an item for non-cash charitable donation tax purposes or determining value for potential sale of the item.
A written appraisal report includes a cover document explaining what type of value is being sought and how the appraisal is to be used. The document must also include a description of the markets explored, the current state of those markets and how the item being appraised fits into that market.
The appraisal report should include a complete listing of items with descriptions, the date and location of the inspection, the effective date of the report, the appraiser’s qualifications and signature.
Professional appraisers are bound by standards called the Uniform Standards of Professional Appraisal Practice (USPAP), which are set forth by the Appraisals Standards Board. These standards are reviewed and updated by the Appraisals Standards Board, and professional appraisers must pass regular testing to ensure that they are current with the standards.
A Uniform Standards of Professional Appraisal Practice (USPAP) certification statement, which certifies that the appraiser has followed those standards, must also be included in the appraisal report. While there is a USPAP Certification statement required for all qualified appraisals, the Appraisals Board does not certify appraisers, therefore there is no such thing as a “USPAP Certified Appraiser.” Beware of anyone who claims to be such an appraiser.
Most written appraisal reports also include photographs of the appraised items and any other additional information that might affect the value conclusion. Do not accept a simple listing of items with values printed on a company letterhead and signed by a business owner as an appraisal. Such listings are not considered qualified appraisals.
During an on-site appraisal inspection, the appraiser will measure, photograph, inspect the condition of the items and talk with you about the history or provenance of your collection.
Appraisers usually charge their fee on an hourly, daily, or per job basis, depending upon the scope of work involved. It is in violation of USAP to charge a fee based on the value of an item. In general, you should expect an appraiser to be able to inspect about four to eight items in an hour.
Back in the appraiser’s office, descriptions are finalized, research is conducted, appropriate values are assigned to each item and the report is written. For every hour on-site, there is generally an additional two to four hours needed in the office.
The appraiser must retain a copy of the report and a work file in secure files for five years, or two years after the final disposition of litigation if applicable, whichever is later.
Unlike a written appraisal report, an on-site valuation service or verbal approximation of value does not involve market research or many of the other elements of the formal appraisal report. Nothing is written down, but the client may take notes. It is basically an informed opinion and should only be used for curiosity purposes or personal information and is not adequate for legal, insurance, or IRS related purposes.
I frequently get calls from clients who are downsizing. In such cases, a verbal approximation of value may be the best and least expensive option. An appraiser can do an initial consultation and help sort through the different value levels of the items, recommend the most economical approach to divesting of the items and which venues might help realize the best prices. An appraiser can also determine if a written appraisal report will be required.
A qualified appraiser is someone who has formal education in appraisal theory, principles, procedures, ethics and law. There are three major personal property appraisal professional organizations where you can find a qualified appraiser; the International Society of Appraisers, the Appraisers Association of America and the American Society of Appraisers.
Personal property appraisers can be generalists or focus on various specialties, such as fine and decorative arts, antiques, sports memorabilia, books and manuscripts, gems and jewelry, machinery and equipment, livestock, automobiles and many other personal property items.
Look for an appraiser who has experience with the type of property that you are seeking to value.
Lauren Travis has over 30 years of experience in the art market as a retail gallery owner, corporate art consultant, artist and personal property appraiser. She is an accredited member of the International Society of Appraisers. She can be reached through artappraisal-services.com or at 215-317-2635.
