The Personal Property Appraisers Post

By Todd W. Sigety, ISA CAPP

Appraisers are not all created equal. Many are true credits to the profession, while others may actually be doing more harm than they realize. Many appraisers have great and wide areas of knowledge as generalists, and others have more focused expertise and specialties. The ability to effectively and properly appraise personal property relies in great part upon competency, which includes due diligence, research and expert advice sought after leaving the inspection.

I raise this topic as I was recently on an assignment where the client had several examples of early American furniture. (Confidentiality issues were addressed with the client.) One piece was a classical mahogany card table, with figured veneers and unique carving on the central column and base. My issue and reason for this post is what the client told me the previous appraiser said about the table during an inspection several years ago.

The previous appraiser, and just for the record, a credentialed member of one of the big three appraisal organizations stated the top portion of the table was married to the base, and the base was probably not American. The appraiser also dated the card table around 1830. In my inspection I did not find any indication the top and bottom were married, and even though the base carving was unique, it did not cause me concern. In fact it is what made the table special. I dated the table near 1815, being purely American classical in style, construction technique, carving and design.

The identification of the table by the previous appraiser was clearly incorrect. Because of the error in identification the value assigned to the card table for insurance replacement cost was grossly undervalued. Just to be clear, I found a near exact table including a near identical carved base in a respected book on Philadelphia furniture with a full page color image devoted to the table. The book dated the table between 1810 and 1820. To add a little perspective, the book stated the card table was a “masterpiece of Philadelphia Classicism”. Certainly high praise. (To Read the Rest of the article click the Read More Link below)

The USPAP competency rule states in part that “Prior to accepting an assignment or entering into an agreement to perform any assignment, an appraiser must properly identify the problem to be addressed and have the knowledge and experience to complete the assignment competently.” The comment section clarifies, stating “competency applies to factors such as, but not limited to, an appraiser’s familiarity with a specific type of property.” If the appraiser is not considered competent, there are procedures in place to continue with the assignment, such as enlisting the help of experts for consultation and property identification and authentication.

Of course the above example is not an isolated case in our profession and it certainly emphasizes the potential for error when appraising items without sufficient knowledge and experience. According to the competency rule, the previous appraiser very well could have, and actually should have contacted an expert on American furniture or better yet, American classical furniture. The table was unique enough and constructed with quality veneers and truly fine carving for a generalist to realize additional research was necessary. The appraiser had time to research and perform the proper level of due diligence, yet because of a lack of competency, knowledge and experience, improper identification assumptions were ultimately made. And, in so doing, believed additional research or opinions were not warranted. Because of these errors in judgment, the appraiser ultimately arrived at an incorrect identification and of course an improper value conclusion followed.

The margin for error in our profession is very small. Even when appraisers follow all proper protocols and standards of practice there remains potential for disputes, challenges and differing opinions. It is the nature of our work. But the ultimate question is, can the appraiser defend the report and its findings. I think in the example of the card table, the appraiser would not be able to do so. In a courtroom, appraisal review procedure or other contested situation, the appraiser would have difficulty sustaining any type of credibility with such a poor work product and lack of due diligence. Once credibility is lost, the full report and results can be questioned.

Perhaps the Peter Principle applies in personal property appraising. The Peter Principle is the theory that in a hierarchy everyone rises to their level of incompetence. It sounds harsh and I don’t necessarily mean it as a negative, just a reality. Appraisers need to be aware of their boundaries and own inherent limitations. Appraisers need to self evaluate and know how and when to cross and navigate competency boundaries effectively and efficiently. Appraisers can’t think they know. The appraisal process and the inspection and identification of fine and decorative arts operate under a hierarchy of standards, practices, knowledge, experience and scholarship.

We all have our limitations. Improper appraisals, identifications and values all have a tendency to harm the profession as well as the individual appraiser. As we work to increase the professionalism of personal property appraising by initiating more standardization, testing and scholarship, perhaps there will be a reduction in negative incidents and incorrect appraisals. This site, the various appraisal organizations, USPAP, the Appraisal Foundation, the International Valuation Standards Committee, the Journal of Advanced Appraisal Studies (shameless self promotion) to name a few all are attempting to ensure higher standards and more qualified appraisers. Because of confidentially rules and the solo-professional aspect of the trade, appraisers must take it upon themselves to ensure their work product is professional, meaningful and correct. There rarely is a review process to catch and correct errors. Usually when errors are found it is too late to correct and potential harm has been caused. This is one reason why networking with fellow appraisers and other experts is so important to our work product and ultimately our profession.

The moral of the story is take the competency rules seriously, don’t make assumptions or just think that you know. Know what you are appraising.