Friday, April 21, 2017

What you need in an appraisal

One of the most common questions we get is "How much is my (fill in the blank) worth?" And the most frustrating question we get is the exact same one. It isn't that we don't enjoy these Roadshow-type moments were we can help someone to greater cherish their family heirloom, because that can be very satisfying. But in most cases, it is an impossible situation for us, much like when someone asks an auto mechanic why their car won't start or a doctor why their finger hurts when they bend it backwards. In all those cases, there are two correct answers: first, "I have no idea without seeing it," and second, "Do you want an appraisal/diagnosis?"

If you feel sick, you go to a qualified doctor. If your car won't start, you drag it to a qualified mechanic. And if you don't know what Granny's old necklace is worth, you bring it to a qualified appraiser. But what you need from that appraiser may not be as simple as just a value--maybe you want to sell it, or maybe you want to know how much insurance you need for it. In the first case, the number you want is what the appraiser, or someone like them, would be willing to pay for it, while in the second case you want to now what you might have to pay to replace it if something terrible happened. The two numbers are normally quite different, and though both are true values you need to know before you bring the item in for an appraisal exactly why you are doing it.

A qualified and competent appraiser will ask you what type of appraisal you want, and will also tell you if the item is something that might be of interest if it were for sale. In some cases, the appraiser will not be a dealer in that type of material--which raises an interesting conundrum: how can an appraiser who is not actively involved in the marketplace have a true idea of current values? The answer to this problem is to find an appraiser who is both well-acquainted with the marketplace and USPAP (Uniform Standards of Property Appraisal Practices) compliant. USPAP requires appraisers who follow that set of guidelines to be completely transparent about any potential interest in objects they appraise, and to establish beforehand what type of appraisal is desired by the client. It is possible to be an active dealer AND be USPAP compliant, and such a person is likely to be a good candidate to handle your appraisal. (Also, by USPAP guidelines, they cannot give "off the cuff" appraisals without following a set of procedures that ensures the quality and thoroughness of the appraisal. Kind of like a doctor won't diagnose your athlete's foot while standing next to you at a bus stop.)

Turkey Mountain Traders does appraisals, and Steve has completed the course to become USPAP compliant. If we can help you with any appraisal needs, we are ready, willing and capable.