How to Choose a Commercial Appraiser
There are many commercial appraisers these days, but choosing the right one for you can be tough. Besides, they’re not all created equal. So what should you consider when making a choice?
1. Define your need.
First and foremost, determine your purpose. Dissolution of business? Gift tax? Insurance recovery? Different appraisers specialize in different areas.
2. Check qualifications.
The Internal Revenue Service (IRS) requires appraisers to be “Qualified,” which means the appraiser should perform appraisals like the subject assignment as his/her main profession, no matter their licensure or certification.
3. Talk to your prospects.
When interviewing potential appraisers, your main objective must be to check whether they have the right qualifications. That means you should ask for their CV and verify their listed experience. Ask for recent work samples as well so you can see whether they are knowledgeable and competent enough. Furthermore, ask them about the methods they employ when performing appraisals.
It’s good to pick an appraiser who can patiently explain what they do and the concepts involved. At the same time, pay attention to the questions they throw at you concerning the assignment. Just by the things they want to know, you can easily see through an appraiser’s level of commitment.
4. .Ask for full disclosure.
Definitely, your appraiser must offer full disclosure, including lack of knowledge on the subject, any interest they may have in the subject property and whether or not they have performed an appraisal on said property within the last three years. In any case, an appraisal needs to be done objectively, and full disclosure will help you decide if you should hire a different appraiser for the job.
When hiring a commercial appraiser, you have other things to look into, such as:
> Appraiser’s litigation experience
Litigation is one possibility that’s impossible to rule out. The appraiser should be willing to provide support and available for consulting or for conferences. When the situation calls for it, they should be able to defend heir appraisal in the court of law.
Appraisers often charge per item or per hour, or they may also collect a flat fee. Stay away from those whose fee is based on the final opinion of value. This is, in fact, a violation of the Uniform Standards of Professional Appraisal Practice (USPAP)’s code of ethics.
Lastly, before you request a bid from an appraiser, they have to know whether the subject property is vacant, leased or owner-occupied. They should also want to know the purpose for the appraisal. This will help them identify the needed property right to appraise and examine the work scope when giving an accurate bid.