What Is It Worth?
Insight into the appraisal process
by Shirley L. Northern, ASA, ISA CAPP, AAA

''I don't want an appraisal. I just want to know what it's worth.''

How often I hear those words over the phone.
When I do, I know I have an educational project on my hands.

Determining the worth of an item is what appraising is all about. But the profession of appraising is so much more than that. Choosing the appropriate market to use in researching the value of an item is an integral, and probably the most important, part of the process.

But before an appraisal can even be started, the appraiser must know what the client is going to do with the appraisal. Is the client going to obtain insurance coverage for the items in question? Is an estate going to be settled and taxes paid based on the values found? Is a couple going to get a divorce and need to be able to divide their marital property up evenly? Have hard times fallen upon clients who must declare bankruptcy or sell their possessions? Did the client sustain a loss due to hurricane, fire, theft or moving damage? Those are just a few of the times when a client needs to know ''what's it worth?''

You may find yourself needing an appraiser. How you go about choosing one and what you should ask an appraiser when you interview him or her is all important. Here are some of the most important questions to ask:

What qualifies you to appraise my property?
The appraiser should have formal education in appraisal theory, principles, procedures, ethics and law. The appraiser should be up to date on the latest appraisal standards as set forth in The Appraisal Foundation's Uniform Standards of Professional Appraisal Practice USPAP. Without formal training, the appraiser is not able to select the appropriate market to research in order to arrive at the appropriate value for your items.

Choosing the appropriate marketplace for the function (what you are going to do with the appraisal) is the heart of all appraisals. If the wrong market it researched, the value will be wrong. For example, let's say a set of Gorham Sterling flatware is to be appraised. It makes a great difference if the function of the appraisal is to obtain insurance coverage or to settle an estate. For one the appraiser should go to the retail market and for the other the secondary market where used silver is most commonly bought and sold. And training is the only way for appraisers to become adept at choosing the correct market.

If you have an item or items with which your appraiser is not familiar, he or she should clearly tell you how the research will be handled. Does the appraiser have a network of other appraisers with various specialties who can be called upon for consultation?

Do all appraisers have similar qualifications?
It is to your definite advantage if the appraiser you select belongs to an appraisal society that tests its members. The appraiser you choose should have been tested and been required to take continuing education classes.

What is your fee and on what basis do you charge?
Never, never hire an appraiser who charges a percentage of the appraised value or charges a ''contingency'' fee. These are definite conflicts of interest and may result in biased values. Most appraisal societies forbid either of these types of charge. Many appraisers charge an hourly rate. Some charge a flat rate after they have inspected what is to be appraised. Either system is fine. Find the one that bests suits you.

Always have a signed contract that clearly sets out the terms of the appraisal and the approximate date you might expect to have the final document in your hands.

What should an appraisal report look like?
You should receive the report in typewritten form. There should be a cover letter thoroughly explaining the methods the appraiser used in arriving at the values found. The body of the appraisal should have a complete description of the item including dimensions and condition of the item. Individual values should be shown for each item appraised. Photographs may be supplied according to your wishes. Also there should be a Professional Profile or c.v. attached outlining the appraisers qualifications.

A competent and qualified appraiser will be happy to answer any and all of the above questions. A qualified appraiser has formal education in appraisal theory, principles, procedures, ethics and law. In some states anyone can claim to be a personal property appraiser, whether they have had formal training or not. It is important that the appraiser you choose be accredited or certified and that he or she belongs to an organization that requires periodic requalification.

There are three main appraisal organizations in this country whose memberships include personal property appraisers.

The International Society of Appraisers (ISA) http://www.isa- appraisers.org

American Society of Appraisers (ASA) http://www.appraisers.org

Appraisers Association of America (AAA)http://www.appraisersassoc.org

These organizations accredit or certify their members after the member has taken an extensive series of courses and passed several rigorous tests. These organizations have rigid codes of ethics which all members must agree to obey. They have appraisal report writing standards which each member must follow. The organizations are active in The Appraisal Foundation (TAF) in Washington D.C. and their members must follow TAF standards and regulations in writing their reports.

You could be comfortable hiring a member of one of these three organizations but don't forget to ask the questions I suggested. Ask for and check with references. Very important financial decisions may be made based on the values found by the appraiser you hire so it is important that you find a competent one.

Don't expect free appraisals!
Your doctor, lawyer and accountant charge fees and so will your appraiser. Your appraiser is a professional just as they are. Appraisers should act professional and should provide you with a professional document with values they could defend in court if the need arose.

I have been told over and over again that The Antiques Roadshow doesn't charge for appraisals so why should I? That show, which is very good by the way, doesn't tell you that, before the show is aired, the items being appraised are thoroughly researched and the values determined well before the appraiser and the owner appear on camera. And, in most cases, the appraisers are being paid by the firms for whom they work. It is wonderful advertising for auction houses, dealers in specific items and for specialist appraisers.