Appraisal Review—The Next Evolution for the Profession

What appraisers and users of appraisal services need to know now!

Editor’s Note: Appraisal review is about managing financial risks, explains Jack Young, ASA, ARM-MTS, CPA, in his article, “Managing Risk with Appraisal Review”, published in the Spring 2021 issue of the ASA ARM E-Journal™. To learn more about how such plays a critically important role in risk management and mitigation for many clients/users of appraisal services, ASA sat down with Jack to hear his insight.

ASA: What is driving this next evolution for the profession and the need for appraisal review?

Young: The economy, as well as our legal and taxation systems depend upon accurate and reliable appraisals. Despite regulations and standards, however, some appraisals are flawed and misleading and can be a risky foundation for financial or legal decisions. Appraisal review determines the credibility and dependability of appraisals in order to your reduce risk.

ASA: Who will be impacted?

Young: Appraisers from all property types (real, personal and intangible property), as well as many users of appraisal services, like attorneys, bankers & lessors, CPAs,  Departments of Government, and corporate executives will have high risk exposure from flawed or misleading appraisals that don’t meet the standard of care for generally accepted appraisal standards.

ASA: What types of situations might benefit from an appraisal review to reduce risks?

Young: Examples could include family law eminent domain, business dissolution or combination, insurance settlements, bankruptcy, collateral loans, lease buyouts, special assets, estate, gift, purchase price allocation, insurance coverage, fair value accounting, property tax and many others.

ASA: Why is appraisal review good business practice?

Young: Because it adds a level of due diligence to what is inherently a risky situation for users of appraisal services. It also measures the credibility of an appraisal report by analyzing the appropriateness of the methods and techniques, reporting on whether appropriate data has been analyzed logically, and whether the conclusions are consistent with the user’s needs. Last it reveals the appraisal’s level of compliance with professional standards.

ASA: What appraisal review training and/or credentialing is recommended?

Young: ASA offers three pathways for professional development. For individuals seeking to become full time review appraisers, ASA offers a comprehensive training and credentialing program centered around its 4-core “Principals of Value” course series. For credentialed appraisers looking to add appraisal review to their lineup of services, ASA offers a 2-course specialty designation program. And last, for users of appraisal services, ASA offers a 2-course certificate of completion program.

To learn more about ASA’s appraisal review training and/or credentialing programs, visit www.appraisers.org/arm, call (800) 272-8258 or e-mail an ARM Accreditation Specialist at credentials@appraisers.org.

Jack Young, ASA-ARM/MTS, CPA, is President/CEO of NorCal Valuation, Inc. He has over three decades of experience in equipment appraisal, expert witness and financial reporting services, including many years as an auditor of financial institutions, auctioneer and auction manager of business assets, machinery, equipment and other personal property. Mr. Young has been a designated member of ASA for 11 years, an active volunteer, most notably serving as Past Chair of the Appraisal Review and Management Discipline Committee and Past President of the NorCal Chapter.

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