If you have never hired an appraiser, or any other professional service provider for that matter, it can be a daunting decision. Shopping on price alone can cause heartache later on, and is not a recommended approach. Complicating the process, no regulatory body dictates who can and cannot practice in the field of appraisal. Though there are some professional organizations for appraisers, there is no single credential that separates a brilliant, savvy appraiser from a complete loser. How do you know which appraiser will provide you with the report that will be acceptable to your insurance company, your attorney, or your financial advisor? If you are an educated consumer, you will hire a USPAP-compliant appraiser and look to the report they produce and see if it complies with the Elements of a Correctly Prepared Appraisal.
The Appraisers Association of America prepared the Elements of a Correctly Prepared Appraisal as a list of information that should be included in an appraisal that is considered to be acceptable in a courtroom, a financial portfolio, or in an insurance claim. A truly qualified appraiser should have no reservations about showing you a sample report, provided you make the request in advance to give the appraiser time to print a copy with any past confidential information removed. If their report includes all the Elements of a Correctly Prepared Appraisal (below) and an inventory of items catalogued using the industry-standard Object ID methodology, it is highly likely that you will be happy with their work product.
Many appraisers cut corners. As you will see in the appraisal report criteria posted below, documenting the value of objects is highly specialized, niche, and often time consuming. Some people who write appraisals may call themselves appraisers, but would never think of preparing a truly comprehensive appraisal report, as it requires time and energy they are not willing to invest. Unfortunately there is no one policing this industry. The onus is on the consumer to engage appraisers that take pride in the quality of their service and make every effort to deliver an excellent product.
Bryson appraisal reports include the elements outlined in the Appraisers Association of America's Elements of a Correctly Prepared Appraisal.
Elements of a Correctly Prepared Appraisal
1. NAME AND ADDRESS OF CLIENT
(On a rare occasion, a client may prefer to remain anonymous. This is permitted when the appraiser has documented the name and address in the client's work file)
2. NAME, CONTACT INFORMATION AND QUALIFICATIONS OF THE APPRAISER
• Statement of professional qualifications - curriculum vitae
3. SIGNED CERTIFICATION
• Statement that the facts contained in the report is true and correct
• Statement that the reported analysis, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are the appraiser's personal, impartial, and unbiased professional analyses, opinions, and conclusions
• Statement of disinterest (or stated interest) on the part of the appraiser (no financial or personal interest regarding the property or the parties involved)
• Statement of no bias on the part of the appraiser (regarding the property or the parties involved)
• Statement of fee structure (basis for charge; that it is not contingent upon the value of the objects appraised)
• Clear division of appraisal when one, or more than one, appraiser is involved, who did what (including inspection) and inclusion of all CV's
• Statement of personal physical on-site inspection by the appraiser (or disclosure of other methods/circumstances)
• Disclosure of all parties providing significant assistance with the report or statement regarding that the appraiser is solely responsible for all information in report
• Statement that appraisal is prepared in accordance with USPAP including date of USPAP followed
• All relevant signatures
4. SCOPE OF WORK (must be clearly and conspicuously noted)
Determine, perform, and disclose the Scope of Work in the report and identify:
• The problem to solve
• General category of items to appraise (i.e., Fine art, household contents, Modern prints, etc.)
• The client
• The owner
• Intended use of the appraisal (See Purpose of the Appraisal, below)
• Intended user(s)
• Type of value (See Type of Valuation Used and Defined, below)
• Definition of value
• Source for definition of value
• Approach to value (See Approach to Value, Used and Defined, below)
• Marketplace (See below)
• Effective date of valuation (See below)
• Assignment conditions (i.e., adequate time to research; adequate lighting; provenance supplied by client; etc.)
• The extent to which the property is identified (Title search (Art Loss))
• The extent to which the property is inspected
Specify the examination procedure followed (i.e., examined under incandescent light and daylight; used a 10X magnification loupe, etc.)
Specify any normal examination procedure that has been excluded (i.e., did not remove from wall, did not examine under a black light, did not examine clock works, etc.)
• The type and extent of data researched
• The type and extent of analysis applied at the arrived valuations
• USPAP compliancy
Type of report (See below)
Updates
5. PURPOSE OF THE APPRAISAL (must be clearly and conspicuously noted)
• Insurance
• Donation
• Estate with a surviving spouse
• Estate with no surviving spouse
• Tax loss
• Equitable distribution
• Estate planning
• Inventory
• Damage
• Loss
• Collateral
• Liquidation
• Net worth
• Other __________________________
6. TYPE OF REPORT (must be clearly and conspicuously noted)
• Self-contained
• Summary
• Restricted use
7. APPROACH TO VALUE USED & DEFINED (each method must be mentioned and discussed as to its applicability in this particular appraisal situation)
• Market Data Comparison Approach
• Cost Approach
• Income Approach
8. TYPE OF VALUATION USED & DEFINED
• Retail Replacement Cost
• Retail value
• Marketable Cash Valuation
• Liquidation value
• Salvage value
• Replacement Cost New (RCN)
9. MARKETPLACE IN WHICH VALUATION IS APPLIED (location and type)
• Auction (high end, mid range, etc.)
• Retail
• Wholesale
• Thrift shops; consignment stores
• Geographic location
10. RELEVANT DATES (note whether current, prospective, or retrospective)
• Date of on-site inspection
• Effective/valuation date of the appraisal (assigned or specific)
• Date appraisal report issued
• Other dates as applicable: date of death, date of donation, date of separation, dates of research, revised date
11. DESCRIPTION OF APPRAISED OBJECTS
• Item
• Quantity (if pair, set, etc.)
• Country/region of origin
• Medium
• Date(s)/period of creation
• Markings (e.g. signatures, maker's marks, manufacturer's marks, inscriptions)
• Full detailed description (including all observable physical characteristics)
• Dimensions (appropriate measurements given the object i.e., an appraiser would weigh a piece of silver, but not a painting)
• Condition (A representation as to condition must always be included and qualified, whether in a per object or per group; not as a general statement for the entire report)
• Frame description and condition.
• Firm statement of value as appropriate to the purpose of the appraisal.
12. DISCLAIMERS, EXTRAORDINARY ASSUMPTIONS, ASSUMPTIONS, LIMITATIONS
• Statement in belief of authenticity (only that the objects appraised correspond to the descriptions provided in the appraisal); but that the appraisal is NOT a certificate of authenticity
• Statement of the number of pages in the appraisal
13. FOR APPRAISALS RELATING TO IRS USAGE ESTATE (E) OR DONATION (D)
• Statement that appraiser has not been disqualified by the IRS (E and D)
• Statement that the appraiser acknowledges that the appraisal will be used in connection with a tax return or claim for a tax refund and that a substantial or gross valuation or misstatement resulting from the appraisal may subject the appraiser to a civil penalty
• Appraiser's Tax ID# (E and D)
• Statement of the appraiser's qualifications specific to the item(s) appraised (D)
• Statement of how the objects were acquired and prices paid (if known) (D)
• Completion of IRS form 8283 (D - separate from report)
• Related Use (D)
• Donee (D)
14. ADDITIONAL DESCRIPTION (if applicable)
• Name of artist/craftsperson
• Name of historical style/school of work
• Title of work
• Provenance
• Catalogue raisonné number or other reference
• Frame information
• Exhibition history
• Publication history
• Other notes (importance of work, one of a pair, etc.)
15. SUPPORT FOR VALUATION CONCLUSIONS
• State of the market discussion/market analysis
• Material provided by consultants (identified)
16. SUPPORT FOR VALUATION CONCLUSIONS (if applicable)
• Comparables (fully presented and annotated as appropriate)
• Biography of the artist/craftsperson/school
• Related analysis and discussion of the object/artist/school, etc.
17. GENERAL FORMAT
• Header/footers on each page should include all relevant information
Appraiser's name and contact information
Client's name
Type of report
Purpose of the appraisal
Valuation system used
Effective date of valuation
• Pagination (e.g., '1/50' or 'page 1 of 50')
• Statement of the number of photographs (If possible, the numbers should correspond to the item number; if the photos are under separate cover, state the page number where the photo is located, e.g., Item #4, Photo page 1/50)