I remember this one appraisal report where I submitted it to an attorney for estate tax purposes for his client, and this attorney actually reads everything that passed over his desk. He sent back my appraisal report with several typos flagged in red ink. The one typo I wrote he flagged and added the words, “Wish they were.” was one where I was discussing the economic impact of the manufacture of “durable gods”. Of course, I meant to write “durable goods”, but missed the second ‘oh’ as I typed it out.
I tell this story to bring up a very important point, and task that I have noticed appears to be lacking in many circles, proofreading our valuations reports. If at all possible, it is a good practice to have someone else besides the report author, read through the report looking for spelling errors, holes in the valuation logic, and overall readability of the report. Those of us who are solo practitioners however have really only one other choice, and that is to let a “finished” appraisal report rest for a day or two, occupy our minds with a completely different task over that rest period, then go back and proofread our own appraisal report.
I worked for several firms earlier in my career where I ended up getting lots of practice proofreading valuation reports written by many different authors, in addition to myself, so I have that advantage when I sit down to proofread my own reports. In talking with other members of our organization, it has come to light that we need another option here in the ISBA.
An idea that has been brought forth is to set up a page (for member’s eyes only) on our new ISBA website, where members could list themselves as offering themselves as a proofreader to other appraisers seeking such a service. Now, I know from personal experience, that a quality review takes time and effort from the reviewer, and that the time sink can vary depending on how detailed a review one is requested to provide.
This unknown time cost is an obstacle that we would need to overcome, as otherwise, many of our most qualified potential reviewers would not volunteer for fear of not having enough time to complete their own paid work. This is why I suggest a paid relationship. Members who wish to have their reports reviewed, would be able to contact a member who has indicated they would be open to reviewing another’s valuation reports, and a fee should be expected to be paid and received. (The ISBA itself would not be a part of this arrangement, it would be a fee paid amongst only the professionals involved.)
This fee has several benefits for each party. Reviewers would know that they are reviewing an appraisal report and being paid for their time, so they would work to get the report reviewed quickly and out the door, in order to receive the fee.
Reviewers would be more willing to review other appraisal reports since they are not losing out on compensated time, and they would have the benefit of seeing other reports and perhaps gaining some valuable insight on how another practitioner is working through valuation problems, formatting issues, and even perhaps coming across some new verbiage that might be useful to incorporate in their own reports.
Appraisers who are willing to pay someone else to review their work would have the benefit of another expert suggesting potential valuation techniques, or adjustments that might be helpful, would be able to send their appraisal report to their client with confidence that at least most of their potential typos have been caught and removed, and in special cases, might even have time for a discussion with the reviewing expert to discuss any areas of a particular assignment that just need to be talked out with another valuation expert.
(Sometimes it is very helpful to talk out a valuation problem with another knowledgeable expert. I have several appraisers whom I consult with and who return the favor. We don’t charge for our discussion time.)
Such an arrangement would, of course, have to be subject to the standard confidentiality that USPAP requires of us all, as well as mutual respect and care from all involved.
For example, in my case, I tend to charge an hourly fee that is capped at a certain level as requested. That way, if I am provided a report that is well put together and that doesn’t take much effort on my part to review, I don’t have to charge more than just my time involved in reading through and marking up those areas of the report that I deem need it.
Of course, sometimes I am provided a appraisal report that requires I spend a lot of time and effort reading through it, cross checking different sections, and making sure the narrative states the same information that is included in the exhibits, and I use up my hourly cap prior to even completing my review. In those cases, I attempt to get through the whole report with at least a cursory inspection of the last few pages before I run out of time, then submit the report back to the appraiser, full of all my commentary and an explanation that I believe they may want a second review after they have made improvements to the report.
We have a pre-recorded webinar available on the ISBA’s LMS website where you can see the type of review I provide for a demonstration report. It is this type of review I am suggesting we ask amongst ourselves. Please note that I am not suggesting we write a review report in compliance with USPAP’s Standards 3 and 4. I do not sign any of these types of reviews, nor do I draw any conclusions of my own. A review assignment subject to USPAP’s standards for appraisal report review is different then a simple proofreading project, in my opinion.
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