Excerpt from the Journal of Advanced Appraisal Studies

The following is an excerpt from the Journal of Advanced Appraisal Studies from appraiser and auctioneer Michael Odell and Dr. Harlan Rimmerman, Director of Education for the National Auctioneers Association. Their paper is called Beware the Risks and covers a wide range of topics which are important to both auctioneers and appraisers.

To order a copy of the Journal of Advanced Appraisal Studies click HERE. Proceeds support the educational initiatives of the Foundation for Appraisal Education.

From Beware the Risks

We have also seen so-called appraisals written by Auctioneers to be used in court for divorces and other legal disputes, which were not much more than lists of auction estimates. Now let’s just say that a sloppy appraisal gets by the court, and your client loses big. It’s possible that an angry client may well take legal action and sue the Appraiser. Let’s face it, an Appraiser may be sued or, at the very least, face disciplinary action or an ethics inquiry by any professional society or association of which he or she is a member.

In a country such as ours, where someone can sue for millions of dollars because a cup of coffee is too hot, how would a sloppy or incom-plete appraisal sit with a jury? You could end up paying tens of thousands of dollars or even losing everything if a jury feels you were negligent in your work.

Roger Durkin, a much respected appraisal attorney, wrote a book entitled The Appraiser As Expert Witness. In his book, attorney Durkin writes how appraisers can become expert witnesses, rather than those being sued. “Over the years, the experience of making mistakes, being criticized, professionally reviewed, and of being cross-examined as an expert witness have combined to teach how to write a better appraisal report supported by a preponderance of the evidence. The experience reinforced the importance of not presenting a poorly thought out appraisal report. There are no perfect presentations. The process of writing a quality appraisal report is an evolving process. There are mountains of knowledge each time an appraisal questions is researched and the opinion written. Lessons on how to improve your work will come from mistakes more than from successes.”

There is a saying in the auction business that goes like this: Some-times the best auction you have is the one you didn’t take. Meaning, you need to step away from a sale that you are not comfortable with. The same goes for an appraisal. The Competency Rule in USPAP suggests that either you do not take the assignment, or you get help if you lack the ability to accurately identify the appraisal question and /or you lack the experience and knowledge to complete the appraisal assignment competently.