Appraisals — What’s it worth?

The most reliable source of valuation is the professional appraisal. Because property values change over time, updated appraisals are essential. Tax issues, estate planning, legal settlements and insurance contracts often require a current, formal appraisal.

• Insurance
  • Coverage
  • Damage and loss claims
• Non-cash charitable contribution
• Probate/estate taxes
• Equitable distribution
  • Dissolution of marriage
  • Division among heirs
• Bankruptcy
• Estate Planning

The Appraisal Process

EXAMINATION: Each piece of property to be included in the appraisal is thoroughly examined by the appraiser for condition, characteristics, and dimensions.  When the item cannot be inspected due to loss, theft, or damage, the appraiser will make critical assumptions based on interviews with the owner and any prior photos.  The information is recorded on the appraiser’s worksheets or sometimes directly into a computer.

PHOTOGRAPHS: Photographs are taken to document the item’s existence and to aid in research.  Photographs are included in the appraisal document, and are either 35 mm or digital photos.

RESEARCH: Value conclusions for appraisals are based on comparable sales analysis.  Research time includes the time taken to identify marks, verify dates, locate comparable sales data, investigate retail markets, and consult experts, if necessary.  This produces an accurate report that protects you and your property.

REPORT: A complete appraisal report has a cover document explaining the type of value being sought and how the appraisal is to be used, the methodology and resources relied upon, the date and location of the inspection, the effective date of the value, a statement that the appraiser has no financial interest in the property, and the appraiser’s signature.  The body of the appraisal contains an accurate description of each item of property in the report, along with the value conclusions.  The addendum contains the appraiser’s qualifications to perform the appraisal.

What you should expect to receive from the appraiser.

• A cover letter with any limiting and qualifying conditions
• The appraiser’s qualifications
• A statement that the appraiser has no financial interest in the property
• A complete and accurate description of the property
• The methodology and resources relied on
• Market analysis and the markets selected
• Defined value conclusions related to a specific valuation date

Do not accept an appraisal if …

• It is unsigned
• It is handwritten
• It does not contain a description of the property
• The appraiser is not willing to defend it in court
• The fee is a contingency fee or is based on the value of the property

To prepare for your appraisal:

• Decide which items you want to have appraised
• If there are items in the attic, closets, or garage, make sure they are accessible
• Unpack items in drawers, boxes, trunks
• Put things of like kind together
  • Arrange china and glass by patterns
  • Sort sterling from silverplate
• Gather receipts, sales slips, photographs, or earlier appraisals and place them with the appropriate items
• Move large pieces of furniture away from the wall
• If this is an estate appraisal and if there is a will, make sure all items specifically bequeathed are available for inspection