That is the $64,000 question. To garner potential appraisal candidates, most business people ask their trusted advisors for names. But is that the most efficient approach?
We suggest that this process is best handled by refining your needs, as follows:
- Do you really understand the need for an appraiser, or has one of your advisors merely urged you hire someone?
- Assuming you agree with your need for one, how simple or complex are the issues? There is a wide chasm of appraisal talent and experience, so you need to be assured that your candidates have comparable credentials, which in and of itself is difficult, at best.
- Whom will review, critique, or audit the work product? IRS, SEC, Court of Law, etc.? If the exercise is to provide an opinion of value to an opposing party (former partner, shareholder, et al), will the appraiser's credibility move the needle? Perhaps both parties can consent to using the same appraiser.
- Do you want the least expensive appraisal? There are numerous choices who will crawl to the bottom of the fee ladder to outdo one another.
- Is the size of the appraisal firm important, especially if the decision maker wants to cover his act by hiring a "name brand?" Name brands usually have some talented appraisers. But will you, the client, get the talent you deserve? Make sure the person writing the opinion is worth the price of admission.
- Does the appraiser or someone on his staff have the requisite credentials to support the work under audit or in Court.