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What is an Appraisal?

An appraisal has been defined in many different ways in a variety of contexts. Generally speaking, it is an opinion or statement of value.That statement of value can be conveyed in several manners and once it is transmitted to a third party it becomes the “appraisal report.”Reports can be written, the most common and preferable mode of transmission, or oral. When a report is rendered by a professional, i.e.,one who holds himself or herself out to the general public as such, that statement of value can be considered to be a legal document or report. Legal accountability for reports in which values are stated, rendered by professional appraisers is generally different and more stringent than the accountability for those who area not professional appraisers, such as collectors, conservators, museum curators or even auction house employees, et al., since it is often assumed that a report given by an appraiser can be relied upon by third parties while statements of value rendered by non-professionals do not have the same level of reliability.

DETERMINING AUTHENTICITY
One of the Elements of a Correctly Prepared Appraisal
Victor Wiener, former Executive Director, AAA

The determination of whether an object is authentic or not may prove to be the most important factor in establishing value. The real Picasso is worth more than the fake; a real diamond will fetch a significantly higher price than its synthetic imitation. Yet, determining the authenticity of a piece may be the most difficult of all functions an appraiser has to perform.

The concept of authenticity embraces two essential considerations: what is meant by “authentic” and who is the correct person to judge whether a piece is authentic or not. What is considered to be authentic for one type of object may not be considered to be authentic for another. Standards of authenticity vary greatly from field to field. For example, while collectors of European furniture see nothing wrong with major restoration, those who concentrate on American furniture may judge a piece with minor additions to be “fake.”

Position Paper of the
Appraisers Association of America
on Professional Opinions of Value (POVS)

Over the past few years many members of the Appraisers Association Of America have been requested to give estimates of value which are different from and do not meet the minimum standards of formal appraisals. These requests for verbal or written estimates have come from a variety of sources: television or other forms of popular media such as the Antiques Roadshow or “Ask the Experts” columns in newspapers and magazines; or in the form of Internet inquiries in which the client will submit a digital image and the appraiser is asked to give an estimate of value based on the quality of the image submitted. Other situations in which such opinions of value are required include: pre-sale estimated from auctioneers, initial consultations with clients, and internal review of appraisal documents for third parties such as insurance companies, et al. Such forms of valuation clearly do not meet the standards of written or verbal appraisals where the appraiser has the time to perform an acceptable inspection, has time to research the object(s) in question and has time to describe the most appropriate market for sale or purchase among other essential valuation factors.

The AAA recognizes that while such estimates of value do not meet appraisal standards they are a reality of life in the 21st century where clients want pricing information quickly, and requests for this type of information will only proliferate as new technology is introduced in years to come.

With this in mind, the Board of Directors of the AAA, after great deliberation, has decided to allow its members to perform suchservices without being subject to a violation of the AAA Code of Ethics

Definition of Service:

The AAA suggests that these types of estimates be referred to as Professional Opinions of Value (Value Opinions).

While the AAA obliges all its members to write appraisals according to USPAP, recognition of POV’s as an acceptable work product, will allow AAA members to perform such services without professional sanction from the AAA.