FREQUENTLY ASKED QUESTIONS
How does the intended use of an appraisal have an impact on the value of the personal property that is the subject of the report?
The function for which an appraisal is prepared influences the value of the property that is the subject of the report. The value placed on an object(s) is likely to be higher if a client has requested an appraisal for insurance purposes rather than for its evaluation as part of an estate. In situations that require the equitable distribution or liquidation of assets within a short time frame values are likely to be reduced because assets are unlikely to be offered for sale under optimal circumstances.
Several definitions of value are used by appraisers. Examples are Fair Market Value, Retail Replacement Value, and Orderly Liquidation Value. It is important for clients to define the use of the appraisal from the onset and to recognize that an appraisal prepared for one purpose can not be used for another.