Stupid Appraiser Scenarios
A business appraiser is asked to value a company, but the appraiser may not inspect the audited financial statements of the company. Instead, the company provides the appraiser with a summary of the company’s financial condition that was prepared by their in-house bookkeeper.
An appraiser of timber is asked to value a 100-acre tract of woodland, but the appraiser is instructed not enter the woodland to conduct any quantity surveys or maturity tests of the stand. Instead, the appraiser is given an undated aerial photograph of the property.
An appraiser who is a member of the Gemological Institute of America is asked to value a 3-carat diamond, but the appraiser is told that the subject diamond may not be inspected. Instead, the appraiser is given a grading report (from an unknown laboratory) that has no mention of any occlusions in the stone.
An appraiser of antique furniture is asked to value a mahogany wood chest, but the appraiser may not open any of the drawers or doors of the chest. An auctioneer tells the appraiser that the chest is an authentic Chippendale.
An appraiser of clocks and watches is asked to value a collection for an estate, but the appraiser is told not to examine any of the timepieces. Instead, the appraiser is given a list of the make, model, and serial number of each item by the executor of the estate and is told to assume that all of the clocks and watches are in good running order.
An appraiser of petroleum reserves is asked to value an oil field. The appraiser is provided with a report from an unknown geologist that has no mention of the sulfur content of the oil.
An appraiser of precious minerals is asked to value a gold ingot, but the appraiser may not weigh the ingot or test it for its carat rating. Instead, the appraiser is given a sheet of paper prepared by an unknown person that lists the characteristics of the ingot along with a photograph.
An appraiser of industrial equipment is asked to value six different milling machines, but the appraiser is not permitted to visit the factory to examine the machines. Instead, an equipment salesman provides the appraiser with the make, model, age, and condition of each of the machines along with a photograph of each.
An appraiser of automobiles is asked to value an antique car, but the appraiser may not start the car or take a ride in the car. Instead, a mechanic tells the appraiser that the car is in good condition.
NOW do you think that hybrid bifurcated real estate appraisal reports are a good idea?
- AMC Engagement Letter: Appraisers Do Not Include Your Invoice - July 28, 2023
- We the People… - April 9, 2023
- Federal Valuation Agency Impact on Appraisers & the Public - July 22, 2022