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ART APPRAISAL SERVICES, LLC
CHRISTINA V. WHITSON, ASA Q & A |
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The following questions are typical of those fielded by personal property appraisers every day. Some of the answers are simple and straightforward, others reflect the complexity inherent to the business of appraisal. What is my art worth? How do I sell it? I don’t know what I have. Do I need an appraisal? Why? Is my art automatically insured on my residential contents insurance? How often should I update that insurance? Do I need an appraisal? Why? Do you charge to appraise art works? What’s the difference between an accredited appraiser and a regular appraiser? What is my art worth? This is the most commonly asked question, and immediately elicits at least three questions from the appraiser. · What do you have, do you know? Often, people do not know what they have. An-oil-on canvas painting signed by Maurice Utrillo worth $100,000+ at auction turns out to be a canvas-transfer print worth about $100—for the frame. A watercolor painting by Winslow Homer potentially valued at more than $1,000,000 is in fact a good print on watercolor paper worth $25. A woodblock print by Franz Marc worth $50,000+ (at auction) is actually a serigraph reproduction worth about $500. As techniques of reproduction and copying get better and better, determining what you have can be more difficult than determining what it’s worth—even for highly qualified appraisers. Nine out of ten times, without viewing the art, and taking it out of its frame, there is no way an appraiser can—or should—tell you what you have over the phone. Having clarified with the client the first issue of any appraisal (identifying the work of art accurately), the appraiser will then ask: · Why do you want to know what your art worth? What do you intend to do with the information? I must ask this question because I will research and analyze different Types of Value, depending on the reason for the appraisal. For example: you have inherited a houseful of “Stuff”. Some of it you may want to keep, some to sell, but it all depends on what it’s worth. “AND the siblings want to “deal” amongst themselves, but want it to be fair. AND, whatever you keep, probably needs to be insured. AND you are in kind of a hurry…pressing money issues.” Three types of appraisal values come into play with this very common scenario. 1. “Fair market value” for equitable distribution of property…and by the way? Will the IRS want a copy for tax settlement? 2. “Orderly Liquidation” for potential estate sale. 3. “Replacement Value” for insurance scheduling. In addition to estate settlement, potential sale and insurance scheduling, there are other compelling reasons why people need to know the value of what they have: · Divorce · Estate Planning · Insurance claim · Donation · What is your time frame? There are very clear IRS and legal laws pertaining to time frames for probate after a death (estate settlement), and non-cash charitable contributions (donation). A good appraisal which will hold up in a court of law takes time—sometimes a LOT of time as experts, dealers, museum curators and artists are consulted. Analysis of research can be complex and critical to the final conclusion of value. If there is insufficient time to perform the appraisal with due diligence, an appraiser may very well decline the assignment. This question is also a polite way of asking: “Are you desperate for cash or do we have a little time in which to sell your treasure to the greatest advantage? Due in large part to the recent economic recession, many people have been forced to liquidate their belongings, but feel defensive about admitting that they do need the money sooner than later. If I am left unaware of this situation, I will research the wrong market, determine the wrong value (Fair market value versus liquidation value), advise you to the wrong sales venue, and generally do you no good at all. Your money and my time will have been poorly spent.
This often leads to another question from you: Do I REALLY need an appraisal? Why? Not necessarily. Those circumstances under which you must have a written appraisal generally anticipate the possibility of legal or government (IRS) involvement: Insurance claim; insurance scheduling; divorce; estate settlement; and donations valued at higher than $5,000. Sometimes an estimation of value can be derived without translating it into a formal written appraisal. For example, if you wish to sell your work of art, you need to know what it’s Fair Market Value is –via an oral appraisal—without putting it into writing, for which the fee is higher. Art Appraisal Services offers oral consultations to fulfill these requirements (see Our Services). How do I sell my art? “Personal property is commonly bought and sold in or at several market levels depending on the quantity, quality and condition of the property. The purpose and function of the appraisal determines the appropriate market that an appraiser analyzes and reports on, relevant to the subject property at auction, wholesale, retail and liquidation.” This passage, (from The Appraisal of Personal Property Handbook, published by the American Society of Appraisers), introduces one of the most important concepts of art appraisal: i.e. the “most relevant market” for a particular artist. Briefly, a painting by a well-known local artist will sell well at a local auction house, or local estate sale. The same work by that artist will sell poorly where that artist has no reputation or market following. Even at the level of internationally known artists such as Picasso, there is a “most relevant market”. Very few people can afford a genuine Picasso oil-on-canvas painting. To reach the very affluent market of art collectors who CAN afford a $95 million painting, a client is best served by going to a top-tier auction house which provides the most comprehensive expertise, advertising and marketing for that priceless work of art. It may be that the winning bid comes from a billionaire residing in Milledgeville, Georgia. But he will not look for a Picasso painting an either the local or regional auction houses near him. Through the process of appraisal—evaluating, researching and analyzing—the appraiser develops a strong feel for the most relevant market for your art work. Trust your accredited appraiser! Why do I need an accredited appraiser? Currently, there are no laws governing the licensing of personal property appraisers, except real estate appraisers. Anyone can call themselves an appraiser, and many do. Therefore it is up to you to check the qualifications and credentials of your appraiser.
The following excerpt is from the American Society of Appraisers: When you hire an ASA-accredited appraiser, you are assured the best valuation expertise on the market, because ASA-accredited appraisers bring experience, knowledge of the market and industry, and solid reputation to the job’s practice and ethics. All members are required to become reaccredited every five years through a mandatory continuing education process. Knowledge of the Industry: Education and Experience: Each accredited member of the American Society of Appraisers has earned a professional designation in one or more appraisal specialties. This accreditation is based on the following criteria: intensive written examinations, submission of representative appraisal reports and screening of applicant’s practice and ethics. Knowledge of the Industry: To qualify for Accredited Senior Appraiser, an individual must have a minimum of five years of full-time appraisal experience; of that five years, at least 3 years of experience must be in the specialty being examined. …As part of the reaccreditation process, designated members are required to submit evidence of professional growth through participation in professional activities and continuing education. A Solid Reputation: Each individual seeking accreditation from the American Society of Appraisers must furnish professional and personal references and be subject to local credit and background investigations. In addition, local chapters conduct personal interviews and evaluate the practices of all applicants. The Society is diligent in its efforts to strengthen and uphold the Principles of Appraisal Practice and Code of Ethics. Members of ASA are further required to conform to the standards and regulations outlined by The Uniform Standards of Professional Appraisal Practice. “The purpose of the Uniform Standards of Professional Appraisal Practice is to promote and maintain a high level of public trust in appraisal practice by establishing requirements for appraisers. It is essential that appraisers develop and communicate their analyses, opinions, and conclusions to intended users of their services in a manner that is meaningful and not misleading.” An accredited appraiser is a professional who takes their work seriously. They pay dues, they conform to guidelines and standards, and they continue to educate themselves regarding laws and changes in IRS regulations. They accept the responsibilities and liabilities that come with affiliation with the three recognized appraisal societies: American Society of Appraisers, International Society of Appraisers, and the American Appraiser’s Association. Whether you choose an accredited appraiser or an appraiser offering evaluation services, ALWAYS CHECK THEIR CREDENTIALS! Do I need an appraisal? Why? Is my art automatically insured on my residential contents insurance? How often should I update that insurance? Do I need an appraisal? Why? Do you charge to appraise art works? What’s the difference between an accredited appraiser and a regular appraiser? What is my art worth? |
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