Appraisal Review & Management – Understanding the Risks and Rewards

An inside look at why appraisers need to educate themselves on this important specialty.

By J. Mark Penny, ASA, ARM-BV, BV-IA

As practitioners, we may be asked to offer an opinion about the quality of the appraisal or appraisal review work. Any number of situations can lead to this, such as litigation or regulatory compliance. Once you’ve done a few reviews, you realize that review work can be tricky and things can go south for a host of reasons. When reviews go bad, they can get very bad, featuring personal attacks, logical fallacies, advocacy and gratuitous cherry-picking. Are those kinds of reviews effective? Are they ethical? Can you get sued for defamation?

If you offer opinions on the quality of another’s appraisal or appraisal review, you are probably performing an Appraisal Review. USPAP Standards 3 and 4 pertain to the development and reporting of Appraisal Reviews. Can your review work survive a cross examination test of USPAP compliance? When was the last time you did an in-depth analysis of USPAP or IVS?

Pondering these questions encouraged me to pursue ASA’s discipline-specific program in Appraisal Review and Management – “ARM”. This special program allows active Accredited Senior Appraisers (ASA) to earn a specialty designation in Appraisal Review and Management by submitting an application, completing AR201 and AR204 courses and submitting an appraisal review report to an examining committee. Experienced, non-members who hold designations in select compeer organizations may also participate in this special program through ASA’s Professional Education Equivalency Certification Program (PEECP).

It’s been a very beneficial decision. The course material, instructors and class experience helped me become a better appraiser and reviewer. The ASA classes offer a deep dive into many aspects of development and reporting of Appraisal Reviews, including relevant professional standards and analysis of issues in the work under review. The classes also provide a healthy dose of good common sense practice that can keep you out of the crosshairs or review boards and plaintiffs’ attorneys.

My instructors were great and the courses well prepared, but for me, the best feature of the ARM program is the opportunity to interact with the other students. Many of ASA’s other principles of valuation courses are populated with early-career participants. The ARM classes are different. Typically, classmates are seasoned professionals who work in various disciplines and countries. They bring a unique mix of experiences and can ask tough questions. Their broad perspectives are mind opening and enriching. I doubt you could meet such a diverse group in any other professional appraisal society.

If you want to benefit from ASA’s international and multi-disciplinary footprint – take up the ARM specialty designation. It pays unexpected dividends!

Learn more by visiting ASA online, or by calling (800) 272-8258 and speaking with an ARM Accreditation Specialist.

J. Mark Penny, ASA, ARM-BV, BV-IA, is managing director for Cherry Hill, NJ based Hempstead & Co., LLC, where he prepares valuation analyses of privately held firms for numerous purposes including recapitalizations, equitable distributions, estate planning, employee stock ownership plans, mergers and acquisitions, fairness opinions, purchase price allocation and calculation of economic damages. Mark is also experienced in estimating the value and useful life of intangible assets including goodwill, customer lists, franchises, trademarks, tradenames and professional degrees. He has prepared valuations for a wide range of businesses including manufacturing companies, communications firms, various professional practices, small businesses and agricultural enterprises. Additionally, he has been qualified as an expert witness and testified in New Jersey, New York, Pennsylvania, Delaware and Florida. He has lectured on the topic of business valuation on behalf of the National Center for Employee Ownership and before estate planning groups. Mark is a designated Accredited Senior Appraiser, with specialty designations in Appraisal Review and Management and Intangible Assets. He has been an active member of the American Society of Appraisers for more than 33 years, and has served in numerous voluntary leadership positions including most notably as International President, Philadelphia Chapter President, Chair of the Ethics Committee and Vice Chair of the Appraisal Review & Management Discipline Committee.