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5 things an appraiser can’t do

Land Values: Farm appraisers can provide a lot of resources and services, but here’s a look at what they can’t do.

As a certified general appraiser, I’ve learned a lot about what appraisers can do — and what we can’t do.

For example, farm real estate appraisers can provide values to facilitate lending. We can help farm families in the wake of a tragic loss of a family member by providing accurate farmland values when needed for decisions about division between family, setting a new tax basis or determining estate tax obligations. We also often help clients make tough decisions about the sale or purchase of a farm.

However, there are some things an appraiser just can’t do. This isn’t meant to be an exhaustive list of every rule that applies to appraisers — there’s a 354-page book for that. This also isn’t meant to be a finger-wagging at a farmer-reader who doesn’t know what appraisers cannot do. These are simply five situations where an appraiser would have to say, “Sorry, but I cannot help you with that.”

Here’s a look at what we can’t do:

1. Advocate. An appraiser cannot be an advocate for a client’s interest and cannot perform any assignment with bias. Unlike an attorney who is supposed to be an advocate for your interest, an appraiser is an unbiased expert who reaches an independent conclusion. For example, if an appraiser is engaged to appraise a farm involved in litigation, that appraiser cannot promise that the conclusion reached will be helpful to the client’s goal.

2. Bend the value. Similarly, although there may often be a range of reasonable prices for which a property may sell, an appraiser cannot bend values in a biased direction. In most situations, a fair market value representing the most probable selling price is to be the conclusion. An appraiser is permitted to provide a value range if it is appropriate for the assignment, but this also can’t be misleading or biased.

3. Value a farm without certification. There are a couple of different types of appraisers, including certified residential appraisers and certified general appraisers. A certified residential appraiser cannot complete a farm appraisal without appropriate supervision. They can do great work on your house, but for farmland, you need a certified general appraiser or an appraiser supervised by a certified general appraiser. They also should be experienced in farm real estate. Check out the “find an expert” tool at asfmra.org for help finding the right farm appraiser.

4. Share information with abandon. An appraiser cannot share confidential information with a third party without permission of the client. Rest assured that confidential information you give your appraiser will remain confidential.

5. Predict the future. Finally, an appraiser cannot predict a perfectly accurate sale price every time. We use the market data to provide our opinion of fair market value. However, neighbors may get into a bidding war. The mood of the day may affect the outcome of an auction. Buyer interest supported by recent sales may have unexpectedly dried up, or sometimes, an outlier sale just happens. All kinds of circumstances may lead to a sale price that differs from the fair market value conclusion of an appraiser who did everything correctly.

So if those are all the things we’re not doing, what are we doing exactly? Protecting public trust in our work, ensuring competency among appraisers, protecting client privacy and acknowledging limitations of what even an expert can know.

Suess is a certified general appraiser with Busey Bank, Edwardsville, Ill., and a member of the Illinois Society of Professional Farm Managers and Rural Appraisers. Email questions to ispfmra@countryside-marketing.com. The opinions of this writer are not necessarily those of Farm Progress/Informa.

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