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Appraisal – Just an Opinion? Tips for Selecting the Right Appraiser.

Date: 
Author: 
Todd Slock
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Articles
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Grain, Dairy, Swine, Beef, Timber, Appraisal
Home > Education & Events > January 2019 > Appraisal – Just an Opinion? Tips for Selecting the Right Appraiser.
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Sooner or later, most people find themselves in need of at least one appraisal of some sort during their lifetime. But, why is an appraisal necessary? It’s basically just on opinion, right?

Yes and No.  Let’s first look at what an appraisal is, as defined by USPAP (Uniform Standards of Professional Appraisal Practice).

Appraisal: (noun) the act or process of developing an opinion of value; an opinion of value. (Adjective) of or pertaining to appraising and related functions such as appraisal practice or appraisal services.*

According to the definition, an appraisal is simply an opinion of value by one who is expected to perform valuation services.  See where the “Yes and No” comes into play?

An appraisal is to be completed by an appraiser: one who is expected to perform valuation services competently and in a manner that is independent, impartial and objective.** These expectations can occur by choice, requirement, law, regulation or agreement with the client or intended users.

This is where it gets interesting and the “No” becomes an important part of the equation. With ambiguity surrounding the issue, how can you be confident when selecting an appraiser?

There are three aspects that help set a good appraiser apart and enable them to provide more than “Just an Opinion.”
  1. The ability to listen and truly understand your, the client’s, appraisal problem.
  2. Industry knowledge in the area of appraisal practice.  i.e. Agricultural, Commercial, Residential, and etc.
  3. Market Competency
Keep these three benchmarks top of mind when choosing an appraiser for your appraisal needs. Of course qualities such as integrity, unbiasedness, and honesty should be inherent when one chooses to call themselves an appraiser.

Listening
The appraiser’s ability to listen and understand your appraisal problem upfront will help them determine an appropriate scope of work to produce a RELIABLE and SUPPORTABLE opinion of value, potentially saving you time and money.
 
Industry Knowledge
There are many types of disciplines appraisers can choose to focus their practice on.  In some cases it can be multiple, but the client should consider the appraiser’s area of expertise.  Selecting an appraiser that focuses a majority of their time on a specific discipline will help in assuring you are receiving a RELIABLE and SUPPORTABLE opinion of value.  In the end you wouldn’t choose a dentist to remove your appendix.  
 
Market Competency
The old adage in real estate is location, location, location. This relates to market competency of an appraiser.  Real Estate markets can vary from town to town; county to county; state to state and more, so choosing an appraiser that is located in or at least very familiar with the “local” market will help assure you are receiving a RELIABLE and SUPPORTABLE opinion of value, which should be your overall goal.

If you’re considering purchasing acres, check out our guide on tips to keep in mind.
 
* USPAP 2018-2019 Edition, The Appraisal Foundation.
**USPAP 2018-2019 Edition, The Appraisal Foundation. 
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