What is USPAP…and why should I Care?

Posted on March 1, 2021 by Theresa (Teri) Brossmer, GG (GIA), ASA, MGA®, ARM-GJ

Every assignment provides us with a new opportunity to be a better appraiser. Whether or not you choose to write appraisals in compliance with USPAP, as appraisers, we should share the same desire to act ethically and competently to protect the public’s trust in the profession we love In 1981, having recently completed the GG program at GIA, I decided to open a gem and jewelry appraisal business. A GG diploma was all I needed to be an appraiser, right? It was not until I had been appraising jewelry for more than 20 years that I stumbled upon USPAP. It proved an authoritative source to guide me through the appraisal process and provided me with a level of confidence I had been missing. My newfound guidance was not new; the Uniform Standards of Professional Appraisal Practice (USPAP) was born out of the Savings & Loan crisis and financial crashes of the 1980s and 90s in which the real estate appraisal profession was implicated. Originally developed with a focus on real estate appraisals, USPAP has been expanded and tweaked to address the entire appraisal profession, including the appraisal of gems and jewelry. The USPAP Standards are based on sound valuation theory and offer advice for practical application that when followed results in opinions of value that will stand up to challenge. The USPAP preamble states: The purpose of the Uniform Standards of Professional Appraisal Practice (USPAP) is to promote and maintain a high level of public trust in appraisal practice by establishing requirements for appraisers. Appraisers must develop and communicate their analyses, opinions, and conclusions to intended users of their services in a manner that is meaningful and not misleading. Since there are no licenses for gem and jewelry appraisers, we are a self-policed profession. To that end, most gem and jewelry appraisal organizations have adopted USPAP and require compliance from their members. The core tenets of USPAP requiring appraisers to act ethically and competently to protect the public’s trust should apply to all appraisers, whether they comply with USPAP or not. According to USPAP, an appraiser is not defined by their credentials, their accreditation, or their title. An appraiser is one who is expected to perform valuation services in a manner that is independent, impartial, and objective. As appraisers, our responsibility to provide our clients with relevant information and credible opinions of value begins when we hang up our appraiser shingle not when we earn a designation or join an organization. After all, important financial decisions will be based on our appraisals. Decisions such as the amount of insurance coverage to purchase, the estate tax liability, or how to equitably distribute the gems and jewelry between heirs. It is perfectly reasonable for our clients to expect independence, impartiality, and objectivity from us when we represent ourselves as appraisers. Thirty years ago, inflated appraisals were commonly used as sales tools. Talk about undermining the public’s trust! An appraisal is not a sales tool. An appraisal is a well-researched, credible opinion of value for a defined purpose as of a specific date. An appraisal is prepared by a competent professional with relevant experience in both the property and the markets in which the property sells. For this reason, USPAP requires the appraiser to assess their competence before taking on any appraisal assignment. The requirement for appraiser competence does not end with the initial...

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