Appraisals: Most Frequently Asked Questions

by Nancy B. Bosch, ISA AM
Accredited Member of the International Society of Appraisers, Since 1997
Professional Appraiser of Antiques, Fine Art and Appreciable Residential Contents

What exactly is an Appraisal?

An appraisal is a researched written opinion of value by a trained professional appraiser. While antique dealers or auctioneers are often extremely knowledgeable about antiques, especially expert in areas in which they specialize, they do not necessarily know how to appraise an item or how to write an appraisal to the acceptable industry standards. Often antique dealers and auctioneers give verbal estimates of value and call that an appraisal. Anything verbal is just that, a statement based upon that particular person’s best guess. It can be an estimate of what something might sell for at an auction, or an offer to buy something from you at a particular price. These are not appraisals, however. Despite being called appraisals, the verbal consultations on shows like the Antiques Roadshow are not really appraisals at all. They are informative educated guesses, approximations of value.

An appraisal is a written legal document based upon prescribed methods of evaluation, research and report writing. Each item in the appraisal is put through the appraisal process. It is photographed, measured and described in the appraisal report in detail; so well described, in fact, that a person could identify the object from the detailed description alone. The value that is assigned is based upon the appraiser finding at least three items comparable to the appraised items that have recently sold. The marketplaces an appraiser uses are appropriate for each item. (You wouldn’t sell a painting by a contemporary master anywhere other than New York or London). Therefore that is the appropriate marketplace for the appraiser to seek comparable recent sales for that item. This appraisal methodology guarantees you a report that will fully reflect the value of your items at the time the appraisal was held. If you own fine antiques and art and are interested in obtaining the correct amount of personal property insurance, an appraisal report by a qualified professional personal property appraiser is essential to fully protect your investments.

How do I find a professional personal property appraiser?
I recommend hiring an Appraiser who belongs to one of the three major Appraisal organizations that fully test and monitor their members: The International Society of Appraisers, ISA; the American Society of Appraisers, ASA; or the American Association of Appraisers, AAA. These organizations fully require their appraiser members to adhere to the standards of the Uniform Standards of Professional Appraisal Practice (USPAP). They also require their appraisers to requalify themselves every five years. This guarantees you of an appraiser who is fully up to date regarding appraisal standards and who will give you an appraisal report that will stand up in court if ever necessary. It should be noted here that an Appraiser should not have any personal interest in the item he or she is appraising. For example, it would be a conflict of interest for an Appraiser to appraise something that he or she is interested in buying from you. The above appraisal organizations require their members to adhere to a strict code of ethics which prohibits these kinds of behaviors and protects you from unethical conduct. Each of the above organizations can refer you to an appraiser in your area who is qualified to conduct the appraisal you require. Each organization has an 800 number you can obtain by dialing 1-800-555-1212 and asking for that organization by name.

When might I need to have an appraisal?
The primary appraisals provided by Bosch Appraisal and Estate Services are for the purpose of obtaining the proper amount of insurance for collectors and inheritors of antiques, fine art and appreciable personal property.

Insurance Appraisals are carefully conducted for people who have a substantial portion of their assets in fine things, often collected over long periods of time or recently inherited. An insurance appraisal is for someone who realizes they have no documentation or idea of the current value of their collection or inheritance. Insurance appraisals are not for everyone, just those people who wish the peace of mind that a fully documented and researched appraisal provides. Because a properly conducted insurance appraisal of personal property is based upon recent comparable sales of similar items, these appraisals will hold up in court any time there is a dispute over the value of an item. An insurance appraisal also allows for appreciation and inflation since the time of purchase. The time to have an insurance appraisal is PRIOR to loss.

Whenever you might wish to sell or buy an important work of art or antique item, a professional appraiser helps you determine the correct and current price for that particular item. You would not want to risk selling an item for a too low a price even if that price is substantially more than you paid for it. Likewise, when you are buying an important piece of furniture or art you might want to have an appraiser determine if that asking price is fair and appropriate.

Another time you might wish an appraisal is when you have inherited antique items from a relative and you do not know much about an item or its value. Especially if you have inherited an entire household, an appraiser can help you to determine what is valuable and what is not.

A Fair Market Value Appraisal for Estate Tax is often necessary when you are required to calculate estate taxes, and your estate attorney or accountant may advise you that an appraisal is required to determine value for that specific purpose.

An Estate Appraisal to determine the fair market value of inherited items is an excellent way to divide personal property between heirs. Termed “equitable distribution appraisals” these kind of appraisals help keep heirs and family members from falling into disagreements and conflicts that can last a lifetime. The appraisal helps executors and trustees divide inherited personal property in a financially equal manner so that all concerned can know the estate was handled appropriately and fairly. Another time an equitable distribution appraisal is conducted is between parties who are obtaining a divorce or business partnerships that are ending.

Charitable donations over $5,000. require an appraisal report, whether you have donated many small items that total $5,000. or one valuable item that you wish to claim is worth more than $5,000. To claim a deduction on your Federal Income Tax of more than $5,000. a Charitable Contribution Appraisal by a qualified appraiser is necessary. Read about recent IRS changes and new requirements for an appraisal for donations of used and worn items totaling more than $500. in the article "Charitable Contributions."

If you are moving valuable items across country or internationally, an appraisal prior to the move is essential to be sure you have complete insurance protection. If you are storing valuable items while you are traveling, living overseas or simply downsizing, an appraisal is highly recommended.

If you have art or antiques that are damaged in transit, while in your home or in storage, a Loss of Value Appraisal can be conducted to determine the amount due you from your insurance company.

Lastly, it is recommended to have your insurance appraisal report updated every five years to reflect both the increase or decrease in value and to add or delete items that you have purchased or sold. This way you will be paying for the appropriate amount of insurance that you need at all times.