Choosing a Qualified Appraiser (Part 1)

No Regulations To Protect Consumers

It may surprise you to learn that the personal property appraisal industry operates without government regulations, unlike its real estate counterpart, which demands stringent licensing requirements. In stark contrast to real estate appraisers who undergo rigorous education, accumulate hundreds of hours of experience, pass tests, and obtain state licensure before they can legally practice, anyone can claim to be a personal property appraiser without meeting any standardized criteria.

This lack of regulation poses a significant issue, particularly when considering the valuation of high-value works, collections, and estates. Shockingly, there are no laws dictating who can proclaim expertise as a personal property appraiser, leaving room for potential complications and inadequate appraisals.

What does NOT automatically qualify someone as an appraiser?

Art Historian

Gallery Owner

Conservationist

Auctioneer

Artist

Art Professor

What motivates an unqualified person to claim expertise?

Many self-identified art and antique appraisers may not fully grasp the extent of their underqualification. While possessing impressive credentials in related fields such as art historian or professor, gallery owner, museum curator, auctioneer, restorer or artist, this expertise does not automatically align with the multifaceted skills required for accurate appraisals.

Experience with subject matter is only one part of the equation; a qualified personal property appraiser must also possess knowledge of appraisal theory, precedence, and methodology, the ability to seek out appropriate markets and assess market presence, adherence to IRS regulations, USPAP guidelines, demonstrate research skills, and stay abreast of market trends, and formulate and communicate substantiated analyses and opinions. Lacking robust direct appraisal experience puts the appraiser and client at risk for many pitfalls. For instance, without advanced industry insights, appraisers may fall victim to fake sales results (a very common industry issue) leading to useless valuations based on false and deceptive data.

The Vulnerability of Incompetent Appraisers

An unqualified appraiser poses not only a threat to their clients but also to themselves. In instances where legal consequences arise due to an incompetent appraisal, the unqualified appraiser often finds themselves at a disadvantage due to their lack of knowledge. Essentially, they become susceptible to manipulation, with someone intentionally influencing them to produce inaccurate or inadequate reports for personal gain. This deliberate exploitation often involves a client requesting an appraisal from someone who they know has a limited understanding of the field.

During my early days in the industry, I encountered numerous requests from individuals seeking fraudulent appraisal claims for various nefarious purposes. Fortunately, my proper training and education enabled me to discern which assignments to decline, protecting both my professional integrity and the integrity of the appraisal process.