Why hire a professional/accredited appraiser?
A professional appraiser is formally trained in appraisal methodology AND has expertise in an area of specialty such as fine art. Trained appraisers have a separate skill set from that of art historians, museum curators or art gallery staff. While these experts can offer valuable information on works of art, only a trained appraiser can develop a conclusion of value that conforms to the expectations of insurance companies, court officials and the IRS. Professional appraisers also adhere to a uniform set of high professional standards including confidentiality of their clients.
How can one work of art have multiple appraised values?
Appraisal results vary according to the intended use of the appraisal. For example, if you need insurance coverage for a work of art, you will most likely need an appraisal that concludes Replacement Value. If you need an appraisal for a tax write-off when donating to a qualifying art institution, the IRS requires Fair Market Value. Different types of value look at different market levels (these can include top-tier auctions, lower-tier auctions or the retail market level, for example) and have their own corresponding methodologies.
Take for example, Replacement Value (basically how much you would have to pay to replace a work of art with a similar work if you had to do so tomorrow) is often higher than the Fair Market Value the IRS will allow you to claim as a charitable donation tax deduction if you donated the same work to a museum. Generally speaking, replacement value often comes from the retail market level and Fair Market Value often reflects one of various auction levels.
What does “USPAP compliant” mean?
The Uniform Standards for Professional Appraisal Practice are quality control standards for all appraisers (no matter their specialty) and are formally recognized, although not enforced, by the U.S. Congress. An appraiser who is USPAP compliant has been formally trained to meet these standards and has passed a rigorous exam to prove his/her understanding and conformity to them. It is not required that personal property appraisers are USPAP compliant; those who opt to comply with USPAP are holding themselves to the highest formal standards in the appraisal industry.
I want you to look at my art and just give me a value like they do on Antiques Road Show, can you do that?
While Antiques Road Show makes for interesting entertainment, it is not an accurate portrayal of the formal appraisal process. A verbal estimate of auction value is not an official appraisal. An official appraisal is a written report attesting to the existence and condition of property as well as concluding its value for a specific purpose. Many times official appraisal reports exceed a dozen pages in length.
Although you don’t see it broadcast, appraisers on Antiques Road Show have access to databases, auction records and assistants who aid them in identifying objects and giving possible ranges of value at auction. There is a lengthy process of research and documentation that goes into a formal appraisal. Although it does happen, rarely should you see a professional appraiser tossing out verbal values “off the cuff.” This is still considered an appraisal report and according to standards set forth in USPAP, must be supported by research and documented in a workfile.
Can two different appraisers conclude two different values for the same work of art?
Yes. An appraisal is an informed opinion of value supported by sound research and data. Given that it is an opinion of value, it is in fact possible for two appraisers to conclude two different values for the same work of art. However, if both appraisers have completed thorough research at the appropriate market level and properly analyzed available data, the chances of a large discrepancy are unlikely.
What types of appraisal reports are there?
The appraisal report is the final product delivered to a client upon completion of an assignment. While this report is most often written, it can also be given orally. The three types are Restricted Use, Summary, and Self-Contained. The most common is a Summary Report which is usually sufficient for insurance purposes. The most involved and detailed report is the Self-Contained Report (preferred by the IRS) while a Restricted Use report is intended for a single user.
No matter the form of the report, all reports require a similar amount of market research to conclude a credible value and, according to the Uniform Standards of Professional Appraisal Practice, must also have a proverbial “paper trail” (known to appraisers as a workfile) to support them.
If I increase the fee I pay you, will you appraise my art at a higher value?
No. Such action is considered unethical and can result in an appraiser’s loss of accreditation. The concluded value for a work of art is independent of the fee charged for an appraisal. Professional appraisers are researchers and reporters of the market for a particular work of art–essentially “messengers” of market data, not creators of it.