Excerpt from the Journal of Advanced Appraisal Studies

Here is an excerpt from chapter four of the Journal of Advanced Appraisal Studies - 2009. Fellow appraiser and ASA member Bob Corey and I collaborated on the article entitled Combining Metrics, Standards and Connoisseurship: A Weighted-Factor Scoring Model.

What that means is that Bob and I took a survey of certified appraisers asking them to rank the 14 evaluation factors of the decorative arts developed by Winterthur scholar and author Charles Montgomery and later Dwight Lanmon. We averaged the factors and developed semantic rating scale of 1-5 for each of the 14 points for the appraiser to rate the indivudual item. As stated in the article, This hybrid formulation returns a combination of standardized evaluation factors based upon the survey results combined with the appraiser’s subjective evaluation of the comparable property using the semantic differential scales as adjusted according to individual property features and attributes.

Bob and I also developed a spreadsheet to compute the values of property based upon selected comparable property, their evaluation points and value, the semantic differential scales as rated by the appraisers and the survey based upon results from ISA certified appraisers. Within the paper are the survey result average, ranges for the survey, explanation of the 14 evaluation points and the semantic differential scales for each of the 14 evaluation points.

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The following excerpt is from the Discussion and Conclusion of the article which gives a good summary of the paper.

In this article, we have discussed the nature of appraisal knowledge and introduced a numerical scoring model methodology commonly used in other social science disciplines. Our goal is to improve the consistency and quality of personal property valuations. We believe that new appraisal methodologies and techniques that incorporate contributions from both metrics and experience will serve to enhance the professional standing of appraisers and benefit users of personal property valuation services.

Using independently established weights, percentages, and data ob-tained by means of a survey of appraisers is a significant advancement in the study of decorative arts and personal property appraising. If followed properly, the methodology we propose should moderate the subjective nature of connoisseurship and valuation.

Even a cursory review of the range of importance ratings assigned by individual respondents illustrates the current idiosyncratic nature of appraisal practice and valuation. The range results from Table 1 suggests that even when using a common value-ranking approach, two fully qualified appraisers chosen at random from among respondents are likely to produce significantly different appraisal valuations because of the vast difference in importance each may assign to the various factors. Add to this the fact that, in practice, no two appraisers are likely to use the same value-ranking schema in their appraisal practice (nor are they required to do so under USPAP) and you can begin to understand fully the need for incorporating proven social science methodologies and metrics into appraisal practice.

As a profession, we cannot be so obtuse as to ignore the problem of conflicting and idiosyncratic appraisal results. For those seeking further evidence, the problem is reflected in the following statement expressive of the court’s dissatisfaction with appraisal standardization: “In the absence of settlement, we are left to adjudicate the validity of conflicting experts' opinions who are convinced that both their conclusions and methods are correct.” Even more damning, in the Annual Summary Report for 2007 the IRS Art Advisory Panel reports that only 36 percent of the appraisals reviewed by the panel were found to be satisfactory. Sixty-one percent of the appraisals reviewed by the panel required adjustments. From a profes-sional standpoint, would you hire a lawyer who wins 36 percent of his cases or place your confidence in a doctor whose diagnoses are shown to be incorrect 61 percent of the time?

We are aware the methodology described in this article is not the definitive answer to the problem. When using the model, the comparable property and values along with the assigned rating factors must be relevant, viable, and be statistically appropriate when compared to the subject property. The evaluation factors selected must be within the range of values that reasonably could be expected to occur from using appropriate appraiser generated samples. As an example, you would not expect the methodology to function properly when comparing an ordinary depression-era glass vase to a highly collectible and desirable Tiffany glass vase. In addition, the appraiser must have the experience and knowledge base in order to properly and effectively score both the subject property and comparable property. If the samples are not properly selected, scored or relevant to the subject property the adjusted mean methodology will not function effectively.

We are also well aware subjectivity will always play a role in the evaluation of cultural property and the decorative arts and it is no different in our study, but it is our hope to reduce the variance associated with subjective differences and personal bias and eventually bring balance and a measure of objectivity to value conclusions. In doing so, the system based upon objective weighted rankings, percentages, and adjusted means may allow final value conclusions to become routinely repeatable by different appraisers and uniquely defendable in contested situations. We must stress that evaluation of cultural property is not to be judged based upon what the nonprofessional perceives as artistic or culturally significant, but must be viewed within the appropriate market by those who have studied and experienced the genre of property. In short, connoisseurs and qualified appraisers with specialty knowledge and not the layman should make the subjective element of evaluation of the subject property in this academic exercise.

(For a sample Microsoft Excel Spreadsheet of the scoring model, please contact Robert J. Corey, Ph.D. at rjcoreyappraisals@hughes.net or Todd W. Sigety, ISA CAPP at toddsig01@gmail.com)