When the appraiser is on the witness stand in Bankruptcy court, depending whose side he or she is on, it is the objective of counsel to get the best (or worst) out of the appraiser. I have never seen an appraiser leave the witness stand unscathed. There are always bruises and battle wounds. Appraising is an opinion, and the appraiser is always entitled to his/her opinion, but the degree to which the opinion is challenged is the shared responsibility of the appraiser and counsel. The greatest error is that a little knowledge is the most dangerous, and there needs to be knowledge of the entire appraisal process, beginning with its very foundation.
The little knowledge often associated with the appraisal process is that appraising is solely predicted upon the three approaches to value: the sales comparison, income capitalization and cost approaches to value. Much has been written on these approaches, and most appraisal courses focus on these approaches.
Many an appraiser loves to write his/her appraisals, but heaven forbid, defending it in court often evokes enormous stress for most appraisers, and for good reason. The appraisal process is very complex, and the three approaches to value are only a small part of this complex process. The key to the expert testimony lies in the foundation.
Elliott W. Weinstein,
As published in the ABI Journal
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