INITIAL ENTRY THAT SPURRED THE DISCUSSION
Mark C. Grove: I’m new to the group and I am an accredited personal property appraiser.
Here are a few definitions the group may benefit by:
Personal property is any tangible object that can be moved: toys, jewelry, fine art, crops, chattel, furniture, yachts, weapons, starships, etc. In the British vernacular these are referred to simply as property and appraisers are known as valuers or surveyors of worth.
Real property is anything that cannot be moved: lots & plots, farms, houses, airports, ranches, buildings, etc.
Intellectual property is an intangible product of the intellect that has commercial value such as copyrighted material (©®TM) including literary or artistic works, and ideational property such as patents, appellations of origin (i.e. champagne), business methods, and industrial processes. Appraisal reports are intellectual property.
Public property is any real or personal property owned by a government entity.
Private property is any real or personal property owned by a non-government entity.
Demand always determines value.
MRICS: Member Royal Institution of Chartered Surveyors (20,000+ hours). FYI: Surveyors of value.
ASA: Accredited Senior Appraiser, member (10,000+ hours) of American Society of Appraisers (ASA).
AAA: Certified Member of the Appraisers Association of America (AAA).
Please don’t take this personally, but I have to say that when it comes to appraising fine arts, antiques and valuable personal property, I feel that all of these titles and “memberships” are highly overrated. I have been involved in the fine art and antique world as a buyer, seller, appraiser and consultant for over 15 years. I have to say that there is NO substitute for being in the field and really knowing the market. Due to the extreme fluctuations in the economy that we have all suffered through in the last 3 years, market value for various categories of antiques have swung wildly. Since some people want an insurance or “replacement value appraisal and yet more and more people want what is known as a “fair market value” (ie, what will someone pay me know. For my things, book and study learning just doesn’t work. Like all markets: real estate, art and financial, they change all the time. The only way to give accurate information is too really know the markets and be in them. Also, 40,000 hours is an insane amount of time. You don’t need that much time to fly a jet. Think about it……….that’s over 5,000 eight hour days, or 10years worth of training. I don’t buy, it and it’s not necessary to be effective as an appraiser.
Mark C. Grove:
Okay ….let’s begin. I couldn’t agree with you more on most of your points.
The most difficult of the Societies to join is the American Society of Appraisers (ASA). To become an AM (accredited member), which is the lower rank designation before Accredited Senior Appraiser (ASA), it takes two years (4k hrs plus loads of other stuff to do) but one of the years can be waived for collateral experience, e.g. Smithsonian museum curator. So the 40k hours that has alarmed you is an incorrect assumption.
I have the highest earned designations in three such Societies that total 40k hours, but the addition is not linear. My hours overlap.
Your comparison of valuation theory to the rigors of jet pilot training are inadequate and your detailed market analyses are spot-on. I often tell prospective ASA applicants who wake up one sunny morning, yawn and stretch, and then decide to become an accredited appraiser that a quicker earned professional designation path is MD.
The ASA training is a difficult ticket-punching pain in the neck for applicants that should have 15 or more years of experience in retail antiques or fine art (low volume), or 5+ years working at a mid- to upper-level auction house (tremendous volume). It is annoying to applicants because one learns so much about the market over time, and thus the stringent requirements seem ridicules; however, once they undertake the proper training, they soon realize its worth.
Time, that’s the hard part. Marketplace exposure is absolutely essential as you said, and also a mandatory requirement. If you ain’t got it, you ain’t going to “get it” until you have had many years absorbing the marketplace factors. And getting “it” in one market, i.e. Boston, does not necessarily translate to, i.e. Chicago, etc. We accredited appraisers must have Continental fluency in a chosen specialty and universal categories competence to prosper (usually but there are some successful specialists).
I was a dealer for 25 years when I awoke one sunny morning and decided to become an accredited personal property appraiser. That’s 25 years of learning from my costly mistakes selling everything from soup to nuts in a 5k square foot building I owned, a 5k square foot antique mall I owned, and doing antiques shows from Rhode Island to Georgia to Nashville to Chicago – all simultaneously, with my own money at risk. I learned a lot but virtually nothing about appraising because the training for that begins by reading and learning case law, valuation theory, report writing in compliance with Federal regulations (USPAP) in instances when there is a tax consequence.
Was it worth it? You-betcha. Most of my clients are wealthy powerful professionals with little free time. When they need a tradesman or any professional, the first thing they look for are credentials because they themselves have earned designations (i.e. MD, RN, JD, PhD) and they know what misery and resources it takes to earn one and maintain one by continuing education.
Besides credentials are required by IRS if there is a tax consequence, and if one expert witness in Court has credentials and the other was too lazy to earn them, guess who prevails?
FYI: Appraisal reports are as important as a Will and are often kept on file for decades by a family. But they are not written for the client. Appraisal reports are written for opposing counsel, or the Judge. Write them well enough with overwhelming comparable substantiation and you’ll prevail in Court. Write one with underwhelming comparable support and you’ll find yourself in Court, a litigant failure, and then be sued by your client for being incompetent. Appear in Treasury Court (one notch down from the USSC) as an expert witness for a tax consequence issue, and the lawyer that hired you will be chastised by the Judge and you all will be thrown out of Court.
You know what an 800 lb canary said to the cat? Here kitty-kitty.