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How do Certified and Non-Certified Appraisals Differ?

June 19, 2013

If you are planning on hiring an appraiser to determine the value of your business assets, you may run into both certified and non-certified appraisers. Without a lot of background information, it can be difficult to know which type of appraiser to choose. At the NEBB Institute, we believe that using a certified appraiser is the right decision every time.

When considering candidates to perform your appraisal, ask about their credentials or look for the initials CMEA (Certified Machinery and Equipment Appraiser) in their titles. Keep in mind that sometimes auctioneers, liquidators, or dealers will call themselves appraisers, but won’t have these credentials.

If possible, look at sample reports or ask other trusted people in your industry to share reports with you. A USPAP-certified appraisal should always contain the following elements:

·         Summary of Facts

·         Scope of Work

·         Degree to Which the Property is Inspected or Identified

·         Extent of Research into the Physical or Economic Factors that Could Affect the Property

·         Extent of Data Research

·         Type and Extent of Analysis Applied in Arriving at Opinions or Conclusions

·         Depth of Onsite Inspection

·         Overall Condition of Equipment

·         Intended Use

·         Economic Conditions

·         Definitions of Conditions

·         Methods of Evaluations

·         Sources Contacted

·         Market Conditions

·         Final Value Summary and Reconciliation

·         Appraiser’s Certifications and Qualifications

·         Photographs

If a non-certified appraisal conducts your appraisal, you could end up with anything – even just a list of items on prices on company letterhead.

It is also true that non-certified appraisals and certified appraisals can contain exactly the same information. Despite this, there is still one very important thing to keep in mind: A certified appraisal will stand up to peer, IRS, and court scrutiny, whereas a non-certified appraisal will not.

By: NEBB Institute

 

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