Animal owners often need an appraiser, whether for tax purposes, insurance, or litigation. What most consumers do not realize is that not all animal appraisers are created equal. The first thing to understand is that appraising animals falls under personal property appraisals. Unlike the real estate appraisal industry, appraising personal property is an unregulated profession, leaving consumers responsible for determining whether the appraiser they engage is qualified. A qualified appraiser is knowledgeable about the item being appraised and trained in appraisal theory, the principles of valuation, ethics, and law. Qualified appraisers should also have completed the Uniform Standards of Professional Appraisal Practice (USPAP) 15-hour course and take the USPAP 7-hour updating course every two years. It is advisable to request a copy of the appraiser’s credentials before hiring a personal property appraiser. Continue reading to learn what else you should be aware of when selecting an animal appraiser.
Three Categories of Animal/Livestock Appraisers
Animal/livestock appraisers fall under three different categories – uncertified, accredited, and senior appraisers.
The first category is uncertified appraisers. This category includes appraisers who do not hold a current license or membership with an appraisal organization and have never taken any appraisal courses. This category also includes appraisers who have lost their certification or appraisal license due to unethical or poor appraisal practices or who have failed to meet the requirements of their appraisal licensing organization.
The second category is accredited appraisers. This category includes entry-level appraisers. There are no mandatory continuing education or course requirements for accredited appraisers. All courses and continuing education are completed on a strictly volunteer basis. While an accredited appraiser may hold a valid, current appraisal membership, it does not necessarily mean they have completed all courses and programs required by the appraisal organization.
The third category is senior appraisers. This category includes accredited appraisers who have also successfully completed an appraisal society's appraisal courses (minimum of 105 hours), have met the Appraiser Qualifications Board's (AQB) personal property appraisal minimum qualification criteria (minimum 700 appraisal hours), completed the 15-hour USPAP course, and is an appraisal member in good standing with their appraisal organization. Senior appraisers are encouraged to meet the AQB's continuing education requirements every five years to maintain their senior appraiser status, but this is not mandatory, and some appraisal organizations do not monitor or track when their senior appraiser members are due for upgrading or renewal. It is important to note that accredited and senior appraisers have sworn an oath to follow appraisal guidelines, which are used to develop and write appraisals and emphasize ethics, confidentiality, and diligent research and investigation grounded in economic principles and practices.
Membership Is Not A Guarantee
Membership in a professional appraisal association is important because it shows that the appraiser is involved with the profession, has peer recognition, has access to updated information, and is subject to a code of ethics and conduct. That said, many appraisal organizations do not require members to complete courses or pass tests to be admitted as full members. Additionally, some appraisal organizations require new members to complete their programs and courses to obtain membership, but do not require any continuing education thereafter. As a result, many of these appraisers have outdated appraisal information because they have not kept up with their skills and education. In turn, this can negatively affect the outcome of an appraisal, especially one required for litigation.
If the appraiser claims membership in a group that trains and tests its members, be sure to ask if this appraiser has personally gone through the training and testing. Some organizations have “grandfathered” members into high member status without testing them. Grandfathering means allowing members to retain their titles and status if they joined before new rules or testing standards were required.
Continuing education is important for appraisers. Procedures and regulations are always changing. As a result, reputable appraisal organizations continually update, expand, and revise their courses to ensure their members perform the work you need with knowledge of the latest professional standards. As a result, when hiring an animal appraiser, it is important to ask what kind of continuing education and courses an appraiser has taken and when they were last taken. As markets constantly change, an appraiser must stay current. The consumer bears the burden of evaluating an appraiser's qualifications.
Animal Species and Breeds
When searching for an animal appraiser, it is important to find an appraiser who is knowledgeable about the species and/or breed of animal you need appraised. Just as a doctor may specialize in one area of the human body (i.e., dentistry, cardiology, or dermatology) or a lawyer may specialize in one area of law (i.e., criminal, family, or real estate), many animal appraisers will often specialize in specific species or breeds. Other appraisers will have diverse backgrounds and offer appraisals across multiple species and breeds. For example, if you need your Black Angus bull appraised for insurance purposes, you are likely not going to hire an appraiser who only specializes in dairy cattle, as this can affect the final valuation of your bull if the appraiser has limited knowledge regarding Black Angus and Black Angus bloodlines. Likewise, if you need to get an appraisal done for a Suri aplaca that is involved in a legal dispute, you should not be hiring an appraiser who is only experienced with sheep.
No appraiser should claim expertise in every species and breed and should be up front with potential clients if they are in unfamiliar territory. A good appraiser knows their limits and is expected to consult with other experts when necessary, or may recommend another qualified appraiser who can fulfill your needs if the species or breed falls outside of their own expertise. Once again, it is up to the consumer to ask questions and ensure the appraiser they hire is experienced and knowledgeable about the animal being appraised. Do not be afraid to ask for the appraiser's resume, background, and references.
Litigation Experience
To adequately write an animal appraisal report, the appraiser must understand the value of the animal they are appraising, as well as be aware of the current market and the condition of the overall economy. This becomes even more important if the appraisal is needed for litigation. In some situations, the parties to a lawsuit are unable to negotiate or reach a settlement and must proceed to trial. It is crucial that the appraiser you hired to complete your appraisal be able to testify as an expert witness in court regarding the appraisal report they prepared. Before choosing the right appraiser for litigation purposes, there are a few important questions that should be addressed:
It is important to realize that if an appraisal is needed for litigation and involves a healthy, living animal, in many cases, it is recommended that you have an appraiser who can view the animal in person. Certain types of appraisals and litigation scenarios do not require the animal to be seen in person. For example, if both parties agree to hire the same appraiser jointly and agree that the appraiser does not need to travel to see the animal in person, as long as the appraiser is properly following USPAP guidelines and adequate photographs and video are provided, this is a scenario in which an in-person inspection may not be required for litigation purposes. Of course, in situations involving a stolen or deceased animal, or an appraisal needed for a specific date in the past (retrospective appraisal), an in-person inspection may not be possible or necessary. Regardless of the situation, it is always best to discuss options with legal counsel.
While there are successful animal/livestock attorneys in the industry, most attorneys hired for animal court cases have little to no animal or livestock knowledge. As a result, the animal appraiser you choose is often asked to educate your attorney, and if need be, the court as well. This is part of their job as an animal expert witness in the courtroom. As a result, not only does an animal appraiser need to be professional and have excellent verbal and teaching skills for the courtroom, their appraisal reports must also be professional, organized, comprehensive, error-free, readable, easy to follow, and easy to understand.
Appraisal Fees
Appraisal fees can vary significantly from appraiser to appraiser and from case to case. For obvious reasons, complex cases involving litigation or multiple animals will be more costly than appraising a single animal for insurance purposes. In my years as an animal appraiser, I have seen different appraisers charge anywhere from $150 to $1,500 for the same product. It is important to remember that higher-valued appraisals are not necessarily the best.
If an appraiser is doing their job adequately, they can expect to spend a minimum of 5 to 10 hours appraising one animal. The more information the client provides on the animal or the more complex the case, the more hours are spent. This includes researching the animal's pedigree, conformation, show record, offspring, veterinary records, and more. For appraisal reports I personally write, the client can expect a minimum of 10 to 15 pages. The more information I have to work with, the larger the report.
I am most often retained to complete appraisal reviews, which involves critiquing an appraisal report completed by another animal appraiser. The most common reason for appraisal reviews is that the client feels the previous appraisal report was poorly prepared, inaccurate, or both. During one particular review I was asked to complete, only one page was used to describe and discuss the animal in question. The report was riddled with spelling mistakes and grammatical errors. The effective date of the appraisal (the date the animal was to be valued as of) was incorrect, the names of the owners and their location were incorrect, no year of birth was included for the animal, and the appraiser failed to research and include the animal's extensive show record. As a result, the appraiser grossly undervalued the animal in question. As a result of my findings, the owner was awarded additional damages, and my report cost them less than the original appraiser’s. In this instance, paying more for an appraisal did not necessarily yield better results.
Most appraisal organizations require appraisers to abide by their Code of Ethics, which prohibits charging a fee based on a percentage of the value of the item being appraised. Hourly fees, flat rates, or per-item charges are acceptable. Do not hire an appraiser who charges a percentage of the appraised value or charges a "contingency" fee. These practices are clearly conflicts of interest and may result in biased values. It is also important to note that appraisal regulations strictly prohibit an appraiser from being influenced to match or beat a competitor's valuation, as this violates ethical standards and undermines public trust.
Conclusions
It is up to the consumer to do their due diligence and research to make sure the animal appraiser they choose is competent and up to date, not only on their appraisal education, but also regarding the current animal industry and economy. Following the above guidelines will help prevent a negative experience with an unethical appraiser and ensure you receive the best appraisal report possible.