Appraisal Witness: Qualified Expert

Appraisal Witness: Qualified Expert

Archive for March, 2008

Appraisal Witness Frequently Asked Questions

Saturday, March 29th, 2008

Appraisal Witness FAQs

What is an appraisal witness?

    An expert appraisal witness is an appraiser who is accredited, compliant with the latest government USPAP rules and laws, an expert who has testified in litigation environments (deposition, courtroom, mock trial, and administrative hearings) and has been deemed by the Judge to qualify to testify on matters pertaining to appraisals. An appraisal witness is a person that has specialized training, education, or experience that has allowed them to develop skill or knowledge in valuations, so that they can form an opinion that will help the fact finders of the case.

What is an accredited appraiser?

    An accredited appraiser is a person who has fulfilled their qualifications to be an appraiser through experience, education or specialized training and has successfully completed the government-sponsored 15 hour USPAP course and passed the USPAP test with at least a 70 point score.

What is a certified appraiser?

    A certified appraiser is usually a real estate appraiser that is licensed by the state in which they reside. A certified appraiser is seldom qualified to appraise personal property.

When would I need an accredited appraisal?

  • You should always seek an accredited appraisal, if there is the slightest chance that the value of the assets appraised will be contested or that the appraisal will appear in court and need to be defended.
  • You will need an accredited appraisal, if you deal with the IRS or any government agency that will review your appraisal.
  • You will need an accredited appraisal, if a bank or lending institution will use the appraisal in conjunction with the lending of moneys.
  • You will need an accredited appraisal in the case of divorce, mergers, partnership dissolution, liquidations and for the valuation of machinery and equipment of public corporations each year, such as power and light companies.
  • All donations that exceed $5,000, will require an accredited appraisal attached to your tax return to qualify as a legitimate deduction.

What kind of appraisal, do I need to satisfy the IRS?

    Only an accredited appraisal will be excepted for the IRS and all Federal government agencies.

Can I get an appraisal from my CPA or auctioneer?

    You can get an estimate of value from any person or authority of your choice. However, to get an appraisal from any person who by law holds themselves out to be an appraiser, this individual must meet the federal qualifications of accreditation and must have taken the government 15 hour course and passed the government USPAP test within the last two years.

What are the new laws that apply to appraisers?

    Federal rules of evidence 702 require that each individual that qualifies as an appraiser must have met the specialized training, education or experience requirements, and must have taken the 15 hour current USPAP course and passed the test. Individuals that hold themselves out as appraisers without these qualifications can be fined $5,000 and a percentage of the over or under valued items appraised.

What is the difference in a real estate and personal property appraiser?

  • A real estate appraiser is licensed to appraise homes, commercial buildings and land. A residential appraiser usually charges $300- $350 to appraise the house and lot.
  • Personal property appraisers are accredited to appraise tangible and intangible objects that are usually movable and require different qualifications to appraise than land and buildings. An example of personal property, would be antiques, machinery and equipment, businesses, vehicles, paintings, coins & gems, logos, trademarks, copyrights, client lists, intellectual properties, boats, pension plans, trusts, annuities, stocks & bonds, collectibles, professions (attorney, doctors, CEOs), careers(actors, comedians, models, professional sports etc.), timber, animals, guns and all chattel. If you can think of an object that is tangible or an intangible item that can be owned that is not included in this list and that does not include land or buildings that are secured to the land, then it also qualifies as personal property. The personal property appraiser usually charges $175-$500 an hour.

Durkin Valuation Associates have the experience, 70 combined years, the accreditation, 2012 -2013 USPAP compliant, and continued education, ASA, NAPA & NAA to exceed all of your appraisal needs including testifying as an expert appraisal witness should your appraisal need irrefutable defense. Call us at (617) 720-0332. Or contact us at:

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Divorce Appraisal of Business Assets

Saturday, March 15th, 2008

Divorce Appraisal of Business Assets is imperative to avoid much litigation. Divorce creates many problems, one of which is the division of assets. When business is involved, it can become even further complicated, which is why a divorce appraisal of the business should conducted during divorce proceedings. Even if the business is held in the name of a single spouse, if the business was purchased, financed or improved upon during the marital period, both parties are entitled to an equitable division.

It is not unusual for only one spouse to be actively involved in the business, which is why a divorce appraisal is necessary. Whether purposely or not, that partner will usually underestimate the value of the business. If the inactive business spouse fails to ensure that a divorce appraisal is undertaken, they may find in the future that they have not received a fair distribution of the marital assets. It is likely to cost you more financially to forego a divorce appraisal, rather than paying the upfront cost of a divorce appraisal to be conducted during divorce proceedings.

Cases over the years, where one spouse has taken the word of their partner about the estimation of a business, and failed to instigate a divorce appraisal, clearly demonstrate the risk you take in failing to ensure a divorce appraisal is undertaken.

A prime example is a case where the husband informs the wife that the business is worth 2 million. Wanting to get divorce proceedings over quickly, the wife agrees to a division of assets based upon the figure indicated by her husband. Once the divorce was finalized, the business was then sold for 12 million,  far more than the estimate originally given to the wife.
Had a divorce appraisal be conducted, this situation would not have occurred. And though a lawsuit can be brought against the ex-husband, it is unlikely to be successful when no divorce appraisal was undertaken during divorce proceedings.

To ensure that you don’t end up in the same situation, it is important that should you be undergoing a divorce, you seek a divorce appraisal to ensure that all assets are valued and distributed fairly. While you might believe that you are saving money by foregoing a divorce appraisal, it is likely that you will actually be losing money.

An accredited divorce appraiser will provide you with a detailed analysis and reports, which is important even during civil divorce proceedings. It is also possible to choose a joint appraiser, so that both parties are able to split the cost of the appraisal. In either case you will need an expert appraisal witness to give irrefutable testimony should the appraisal need to be defended.

Accredited appraisers will follow the USPAP 2012 rules and regulations when conducting a divorce appraisal, so even if two different appraisers were to conduct an evaluation of the same assets, the values they arrive at may not be exactly the same, but should be fairly close.

Whether it’s a corner store, or a multi-million dollar business involved, a divorce appraisal should always be conducted once divorce proceedings begin, to ensure equitable distribution occurs.

Durkin Valuations Associates Has:

  • Seven Senior Professional Appraisers Nationwide
  • 70 years combined valuation experience
  • Acreditations; ASA, NAPA, GPPA
  • USPAP 2012 – 2013 Cpmpliant
  • Qualified as EXPERT APPRAISAL WITNESSES

Give us a call at (617) 720-0332.

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Ipse Dixit Defines Unqualified Witness

Saturday, March 01st, 2008

Ipse Dixit is defined in Black’s Law Dictionary as “because I said so”. Yesterday’s appraisal witnesses are unqualified witnesses today because Judges are disqualifying the witness on qualifications! No longer can a witness say “believe me because thats the way its been done for 25 years”, or “I know because I have 25 years of experience so don’t question my value!” The CPA that comes to court as an expert appraisal witness is disqualified, the reason, ipse dixit. The auctioneer that wants to testify, “I’ve sold hundreds of those over the last 30 years and it has an auction value of $2500 will be disqualified, the reason, ipse dixit .

Years of experience is only one strong point of an accredited appraiser. To certify an appraisal that can be defended irrefutably the appraiser must apply the 2008 USPAP laws, standards and rules. Another criteria for the expert appraisal witness is that the individual apply the correct methodology including comparables, history and venue of past sales to come to a fair market value of the items appraised. Ipse dixit is far from the equation of valuation. The Judge is looking for absolute understandable format that the court can follow within all appraisals that enter litigation.

The pedigree that an expert appraisal witness has as part of his credentials needs to be from the Appraisal Foundation’s list of approved appraisal schools. Should you have a degree in agronomy, consider it as irrelevant as Certified Public Accountant and not part of your appraisal credentials and will be classified ipse dixit if testifying as an expert appraisal witness. Can you be a CPA and an accredited appraiser? Absolutely, if you have completed approved appraisal education courses and have valuation experience and complete an appraisal according to USPAP Standards and Rules.

Durkin Valation Associates meet all the criteria of the law, educational institutes and the court to appraise and testify as an expert witness. We have testified in numerous cases where the opposing “appraiser” was disqualified; primary reason, Ipse Dixit. The laws have changed for appraiser qualifications… don’t find out after you arrive at the deposition or court. Hire the best, call for questions, Durkin Valuation Associates.

Phone (617) 720-0332

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