Can I give my Fair Market Value appraisal report to my insurance agent in order to insure my possessions?
No. You cannot insure any personal property with a fair market value appraisal. You need a replacement cost appraisal, which uses the cost approach to value instead of the sales comparison approach.
What is USPAP compliance?
USPAP stands for Uniform Standards of Professional Appraisal Practice. It is considered the quality control standards applicable for real property, personal property, intangible assets, and business valuation appraisal analysis and reports in the United States and its territories. Appraisers revisit these standards every two years after their initial course and exam. This is not a certification. It is a commitment to remain compliant to the established standards of the industry.
What is shill bidding?
Shill bidding is when you bid on your own items that you have consigned to an auction company to sell at public auction for you. This is illegal and harmful to the authenticity of the fair market, because “bidding up” an item’s selling price is falsely inflating it’s concept of value in the fair market.
How do I know if I need an appraisal?
You need an appraisal if you wish to insure an item.
You need an appraisal if you create an estate plan that considers an equitable distribution of property to your heirs.
You need an appraisal if you need to sell some things and want to know the value of certain items in order to determine the best market to sell them in.
You need an appraisal if you find yourself in a probate situation and the family needs to know what everything is worth so that they can divide up the inherited property equally.
You need an appraisal if you are going through a divorce and there is a dispute regarding the value of items that must be divided up equally according to their monetary worth in the fair market.
You need an appraisal if you have not gotten an updated appraisal for your estate plan or insurance coverage in more than five years.
You need an appraisal if you will be donating anything with significant value to a charity.
How do appraisers come up with their values for the things they appraise?
Appraisers use two basic approaches to determine an items value. In order to determine Fair Market Value the appraiser uses the sales comparison approach and considers what an identical item or a comparable item has sold for at auction as of the effective date of the report and/or the past few years. In order to to determine value for insurance coverage the appraiser identifies what the price of an identical or comparable item is at sale for in the current market.
Can one appraiser value everything in my house no matter what it is?
No. Most appraisers can value the ordinary residential contents. However, all appraisers have scope of work limitations and areas of specialty. For example, a very unique collection of Aztec artifacts will need be valued by an appraisal specialist in that field. A diamond ring must be valued by a gemologist. Fire arms must be valued and handled by a gun specialist. Expensive fine art must be inspected by an art authenticator and valued by a fine art specialist that concentrates in the specific style of the painting.
Can the one appraiser you hire attain these specialists and manage the process?
Yes. Your appraiser can get your unique treasures in front of the most appropriate specialists to determine the value and then the appraiser can incorporate these findings into the final report with reference to all contracted assistance.
