An appraisal is a formal document concluding a supportable opinion of value. It is prepared by an unbiased expert who is knowledgeable regarding the property and who acts in accordance with accepted standards of practice.
What Are the Most Common Types of Value?
Fair Market Value: Property that would change hand between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts. It is used in valuations for IRS, including charitable contribution and estate tax, and often in circumstances such as when art is used as collateral to secure a loan.
Replacement Value: The price to replace a property with another of comparable quality in a reasonable time frame and usually without negotiation. It represents the highest of appraisal values and is typically used in the context of insurance matters.
Is the Cost of the Appraisal Associated With the Value of the Work Appraised?
No. It is unethical for the cost of a professional appraisal to be contingent upon any value conclusion.
What is the Difference Between an Appraisal Report & a Restricted Appraisal Report?
An appraisal report contains a complete rationale for how the appraiser arrived at their value conclusion, while a restricted appraisal report is a condensed version which omits this explanation. (Equivalent research is undertaken and all data is retained in the appraiser's work file.) The use of a restricted appraisal report is limited to cases in which the client is the only intended user of the report.
Is the Appraiser an Advocate for the Client?
No. A professional appraiser may not perform any assignment with bias or accept any assignment that includes the reporting of predetermined opinions and conclusions.
Why is it important for an Appraiser to be Independent?
A professional and accurate appraisal must be impartial. Appraisers who operate independently avoid conflicts of interest, such as concluding a low value if interested in purchasing the work or concluding a high value to encourage the owner to sell on consignment.
Is Client Information Kept Confidential?
Yes. Absolutely no confidential client information or related assignment results will be disclosed to anyone other than the client or parties specifically authorized by the client.
Does Blades Appraisal Services Need to See the Work in person?
No. Depending on the objective and intended use of the appraisal project we can execute an appraisal report from photographic images along with interviews about the appraised property. However, we do recommend on-site examinations to identify and inventory property to be appraised. Photographs cannot be the basis of an appraisal if issues of authenticity, condition, or age are in question. Blades Appraisals and Art Resources, LLC is based in Houston, Texas and is available to travel as needed.
What is USPAP?
The Uniform Standards of Professional Appraisal Practice (USPAP) is a publication that outlines Congressionally-authorized appraisal terms, rules, and standards to ensure that appraisals are objective and ethically prepared. It is published every two years by The Appraisal Foundation, a non-profit authority on the valuation profession.
