The New York Times recently published an article titled “The Specialized Art of the Appraisal”. It stresses the importance of keeping tabs on your collection, knowing what you have and the values.
“Whether it is fine wines, vintage movie posters or abstract paintings, some people spend a great deal of time and money compiling collections of valuables. Even if they’re collecting out of personal passion, rather than as an investment, it makes sense to keep tabs on how much the collection is worth.”
An appraisal is an essential tool to accomplish this goal. The article goes on to explain the importance of selecting the correct appraiser for the job, checking the appraiser’s qualifications and additional helpful tips.
“Personal-property appraisers aren’t licensed, but reputable professionals are affiliated with at least one of the three major appraisal organizations: the Appraisers Association of America, which focuses on personal property; the American Society of Appraisers, which includes specialists in real estate and other areas; and the International Society of Appraisers. ”
Credentialed members of these three associations have been tested in their specialty area and the Uniform Standards of Professional Appraisal Practice (USPAP), abide by a Code of Ethics and have to requalify every five years.
To read the entire article click here.
You might be surprised to hear that there are no Federal or state licenses for personal property appraisers in the United States. When it comes to placing a value on your antiques, art and household contents, anybody can say they are a appraiser. If a personal property appraiser claims to be licensed, it is for some other aspect of their business, e.g. auctioneering, real property appraising, private investigation or even a city business license.
How are personal property appraisers credentialed and what standards do they follow?
Appraisers are credentialed by their professional appraisal associations. The three largest associations with personal property appraisers are the International Society of Appraisers (ISA), the American Society of Appraisers (ASA) and the Appraisers Association of America (AAA). In addition to testing, education and demonstration of appraisal experience, designated members must requalify every 5 years. All members are bound by a Code of Ethics.
The Uniform Standards of Professional Appraisal Practice (USPAP) is a set of guidelines published by The Appraisal Standards Board at The Appraisal Foundation. It is the source of generally accepted standards and ethics for appraisers in the United States. Appraisers must take USPAP courses and keep current with the updates every 2 years. In addition, the Appraisers Qualifications Board has developed voluntary minimum qualifications for personal property appraisers.
The IRS has established the following requirements:
- A Qualified Appraiser has earned a professional designation from a recognized professional appraiser organization for demonstrated competency in valuing the type of property being appraised, or has met certain minimum education and experience requirements.
- The individual regularly prepares appraisals for which he or she is paid.
- The individual demonstrates verifiable education and experience in valuing the type of property being appraised.
- The individual has not been prohibited from practicing before the IRS under section 330(c) of title 31 of the United States Code at any time during the 3-year period ending on the date of the appraisal.
- The individual is not an excluded individual.
What should you do to make sure you are getting a qualified and ethical appraiser?
- Choose an appraiser from a major appraisal society and check to see if they are current. Certified and Accredited are the highest levels of designation.
- Ask them about their experience, areas of designation and expertise.
- The appraiser should provide a 3rd-party independent opinion of value, and not have a potential conflict of interest.
- Choose an appraiser who is USPAP compliant and IRS qualified.
Perhaps personal property appraisers will be regulated and licensed at some future date. In the meantime, the user of appraisal services should carefully consider their selection.