An Evaluator is an independent expert who appraises the value of properties that are not frequently traded, such as antiques in an estate or rarely traded stocks or bonds. The evaluator’s fee can vary, being either a flat amount or a percentage of the appraised value. This term is often used interchangeably with “appraiser”.
Role and Responsibilities
Independent Expertise
Evaluators act as independent third parties, ensuring objective and unbiased assessments. Their expertise includes knowledge of market trends, specific item characteristics, and legal factors affecting value.
Appraisal Subjects
Common items subject to evaluation include:
- Antiques: furniture, art, collectibles
- Rarely Traded Stocks: privately held companies, thinly traded securities
- Bonds: municipal, corporate, and specialized debt instruments
Fee Structure
Flat Fee
A predetermined amount agreed upon before the evaluation process begins.
Percentage of Appraised Value
A commission-based fee structure where the evaluator earns a percentage of the appraised value of the item being evaluated.
Historical Context
The profession of evaluating antiques and rarely traded financial instruments has evolved over centuries. Early valuations were often informal and based on local expertise, but modern evaluators require formal education and certification.
Development of Standards
Professional standards for evaluators have been established by organizations such as:
- The American Society of Appraisers (ASA)
- The International Society of Appraisers (ISA)
- The Royal Institution of Chartered Surveyors (RICS)
Applicability
Estate Planning
Evaluators provide critical assessments for estates, helping determine the value of assets for inheritance or sale purposes.
Legal Proceedings
In legal disputes or divorce settlements, evaluators offer unbiased valuations to ensure equitable distribution of assets.
Investment Decisions
Evaluators aid investors by providing valuation reports on rarely traded stocks or bonds, guiding informed investment choices.
Comparisons
Evaluator vs. Appraiser
While the terms are often used interchangeably, “appraiser” is more commonly associated with real estate, whereas “evaluator” is used in broader contexts, including financial and personal property.
Related Terms
- Appraiser: A professional who estimates the value of real estate or personal property.
- Valuation: The process of determining the current worth of an asset or company.
- Assessor: Typically a public official who evaluates property value for taxation.
FAQs
What qualifications do evaluators need?
How do evaluators determine the value of rarely traded stocks?
Can an evaluator's appraisal be used in court?
References
- American Society of Appraisers (ASA). (n.d.). Retrieved from ASA Website
- International Society of Appraisers (ISA). (n.d.). Retrieved from ISA Website
- Royal Institution of Chartered Surveyors (RICS). (n.d.). Retrieved from RICS Website
Summary
An Evaluator is an indispensable professional in the fields of finance, real estate, and personal property valuation. With their independent assessments and extensive expertise, evaluators ensure that items of limited trading, such as antiques, stocks, and bonds, are valued accurately and fairly. Whether in legal contexts, estate planning, or investment decisions, the evaluator’s role fosters transparency and informed decision-making.
