Saturday, April 15, 2006

Add Appraisals to Your Roster of Services

Appraisal work can be an excellent additional source of income for auctioneers, but it's not without its trials. A fellow auctioneer and friend had told me a story while we were in the Auction Marketing Institute's (AMI) sponsored GPPA (Graduate Personal Property Appraiser) class in Orlando, FL in 2002. He recounted an embarrassing situation where he was providing expert witness testimony before a judge for an appraisal case. He was one of three appraisers in the courtroom. Fortunately for him, only he and one other appraiser were within a couple thousand dollars of each other on this high dollar case. The third appraiser was almost one hundred thousand dollars away from any realistic value, and as such, he was summarily dismissed by the judge. Although my friend had 25 years of experience in appraising, he was ultimately dismissed by the judge because the other appraiser was certified, and further he used the USPAP (Uniform Standards of Professional Appraisal Practice) guidelines to write his report. My friend, although an expert in the disputed area, was not certified as an appraiser at that time. He told me that after that embarrassing experience that he was going to acquire the training to become a certified appraiser as soon as possible. The moral of this story is unless you are a certified appraiser your experience, although important and possibly relevant, does not mean much to the legal authorities.

As a certified appraiser, I receive calls all of the time from potential customers who think I am the Antique's Road show. Further, they believe that I am going to appraise their items at no charge. Guess again? The appraisals on the Antique's Road show don't mean anything significant, as they are more akin to a Desktop Opinion (A preliminary step to a full appraisal.). Have you ever seen an appraiser on the Antique's Road show provide their appraisal in writing? I tell my customers that I charge either an hourly rate or a flat fee, and those who would charge you a percentage of value are violating USPAP and federal law. This is the best way to spot someone who is uncertified!

Sometimes I even receive calls from people asking me to appraise their homes. I politely explain that Personal Property is different from Real Property (Buildings & Land). Real Property appraisal requires a license in most states. The only building exempted is my state is a Mobile Home. Check with your state for laws pertaining to appraisers.

Occasionally, the challenging customer will object to hourly rates or flat fees, stating "that such and such a business will write an appraisal for me for much less." I inform the would-be customer that there is a lot of time, research, and writing of a report. I query the potential customer, and ask them (1) what certification does this other appraiser possess, and (2) what is their "basis of valuation" or (3) "approach and definitions to value"? Lastly, I politely inform the complainant that if they want invest their hard earned money on such a questionable appraisal, I would gladly provide them with a more comfortable roll of Charmin, that might be more valuable to them instead.

The bottom line is this, as an appraiser you are only as good as your training, experience, and certification. Without a certification you only have an invalidated and basically worthless opinion. Your uncertified opinion is meaningless in court, especially when you are providing expert witness testimony on appraisals in areas such as marriage dissolution, bankruptcy, probate & will, or insurance matters.

There are many organizations that offer appraisal certification programs. Caveat Emptor (Buyer beware.)! American Society of Appraisers (ASA) is one of the largest certifying boards. I am partial to AMI's GPPA certification. For those of you NAA members with a previous GPPA designation, you just recently received notice that you need to take the full USPAP course before 2009. For more information on becoming an appraiser contact the NAA and AMI's - Sharon Dessert at 888-541-8084.

Tom DiNardo is co-owner of DiNardo & Lord Auctioneers of Anacortes, WA. Tom is an Auctioneer, Appraiser, and Writer.

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(c) 2004 Tom DiNardo - All rights reserved.