The purpose of an appraisal review is to develop a credible opinion of the quality of another appraiser’s work. For that opinion to be credible, the review appraiser must have competency to perform appraisal reviews. Can anyone perform a competent review? That depends…
Who is qualified to review appraisals?
The reviewer is an appraiser with competency in the area of appraisal discipline, such as in Machinery and Technical Specialties for machinery and equipment appraisal reviews. The review appraiser must have the knowledge and experience required to identify and perform the scope of work for producing a credible review report. The competency level required for an assignment may include familiarity with the type of machinery and equipment, the secondary market where these asset exchange ownership, an analytical method, a formula, appraisal standards, and applicable laws, statutes, and regulations. As with any appraisal service, the reviewer must be competent with professionally accepted appraisal practice.
Is there formal education and an accreditation in Appraisal Review?
To assist appraisers in obtaining the necessary level of competency, the American Society of Appraisers offers courses, exams, and a separate accreditation in Appraisal Review and Management (“ARM”). An appraiser designated in ARM for the Machinery and Technical Specialties appraisal discipline would have an ARM-MTS accreditation in addition to an Accredited Senior Appraiser (“ASA”) accreditation. The designation is earned when the senior appraiser has taken the AR201 and AR204 courses, passed the two course exams, demonstrated competency by passing the peer review of a sample review report, and been accepted by the American Society of Appraisers for accreditation. These courses prepare the appraiser to not only properly review another’s work product, but also to comprehensively analyze and competently report the reviewer’s scope of work, analysis, and conclusions to be in compliance with the Uniform Standards of Professional Appraisal Practice (“USPAP”) Standards 3 and 4.
The expert witness consideration
Machinery and equipment appraisal reviews are beneficial for making business decisions, for insurance loss claims, and for negotiation and litigation strategies. In litigation cases, choosing an experienced and educated reviewer could mean the difference between a win and having your appraisal expert discredited even before giving testimony. Attorneys hire an appraisal reviewer as a consultant to review one or both parties’ appraisal reports to assist them in structuring their case and preparing deposition and cross examination questions. Our expert appraiser at For What It’s Worth Appraisals Inc has the experience and education in appraisal review to provide our clients with consultant and expert witness services for litigation cases.
Watch this video to learn more about appraisal review services.