Appraisers Are Your First Line of Defense!

Everyone dreams of being the lucky devil we hear about every so often who picks up a piece of artwork or artifact at a garage sale, and it turns out to be worth a small fortune.

Of course, no one wants to be the seller who turns on Antiques Roadshow a year or so later to see their old item hauled before the show’s appraiser who then gushes over the piece and estimates a value that might have paid off the previous owner’s house.

That’s why I always say, ‘be sure of identity and value – call your appraiser!’ While I often couch this in comic terms, I’m actually very serious.

Many times have I worked for a client whose assumption was that book, those prints, those primitives, those whatever, were garage sale fodder - only to have me come in and identify them as historically significant and highly desirable to the market. In fact, there is no better feeling for an appraiser than saving a client embarrassment and finding them money where they thought there was little or none.

A large portion of the appraisals I’m asked to do are for insurance. The client knows they have nice things and want documentation to protect those items - and themselves - from risk. Very wise.

Of course, things are not always so clear-cut for everyone. Sometimes people inherit items. Sometimes the items have been in the family for years and are assumed to be this or that and have X value, but no one knows for sure.

Be sure of identity and value, call your appraiser!

Recently, in one of the many Facebook collector groups I follow, there was a story about a man who was selling a flag for $200. Happily, the prospective buyer knew it was worth far more and insisted on giving the seller far more so the buyer ‘could sleep at night’ after he resold the item for what he knew was going to be a handsome profit.

Sadly, I don’t recommend counting on finding many people whose belief in honesty and karma outweighs their pursuit of short term gain.

Reputable appraisers - that is to say those affiliated with major appraisal associations like the International Society of Appraisers, should be perfectly willing to help you with value discovery. The process is usually quick and inexpensive. The professional membership and credentialing is vital because it ensures they’re not going sell you an appraisal based on made up numbers you’ll later discover were bogus, just so they can take a few hundred dollars off you and disappear.

And remember, if an appraiser begins talking to you about buying the item directly, excuse yourself from the conversation and contact me so I can direct you to a real appraiser in your area!

Appraisal: Being Sure of Identity and Value

In this new series of blog posts, I’m going to outline basic concepts and terminology used by appraisers that will help you understand the methodology behind the appraisal process.

So, just what is an appraisal?

Someone tells you ‘what something is worth,’ right?

Well, not exactly.

Of course, there’s usually also at least one smarty-pants orbiting the conversation that will spout ‘it’s only worth what someone will give you for it,’ and then ‘har har har’ with an air of unearned self-satisfaction.

Ignore them.

Definition: Appraisal is the act or process of developing an opinion of value, estimating cost, or calculating the present worth of future earnings; a written or oral report documenting same; of or pertaining to appraising and related functions, e.g. appraisal practice, appraisal services.

Pretty simple, eh?

It is. Where it can get complicated is in the application, when we put this process to work for a client’s unique needs – and every appraisal project is different in some way.

It may be in the objective – meaning the client wants to obtain insurance coverage, settle an insurance claim, make a charitable donation for tax purposes, split up personal property equitably (in short: equitable distribution), resale, or simple curiosity. Or it could be in how the properties are being administered during the appraisal process.

Each of these objectives brings its own approaches and parameters. Your appraiser should listen carefully to your needs, decide which form of appraisal will suit your needs best, and explain in great detail how their work is going to address those needs.

The appraiser should also be available after the appraisal is finished to be sure everyone understands the scope and limitations of the appraisal report, and answer any questions you or your authorized agent might have.

Your appraiser should also have a confidentiality clause in their report, meaning they will not share the details of your report with anyone without your written permission, or unless ordered to by a court of law.

For instance, while my website shows many objects I offer appraisals for, none of them have been subject to any appraisal done by myself.

An appraiser should also be honest with you if what you have is within their specialty areas. After all, it’s not possible to know everything about everything. Legitimate appraisers outline their specialty areas clearly and should have a network of other appraisers they can call in to assist in a project that has components outside their competency.

Appraisals should always be USPAP certified. USPAP, or Uniform Standards of the Professional Appraisal Practice, are quality control standards – ethical and performance - for personal property, intangibles, and business valuation appraisal analysis and reports in the United States and its territories. The IRS requires appraisals written for their use to be USPAP-compliant for certain amounts.

Formally educated appraisers that are also members of professional appraisal associations like ISA are required to maintain USPAP compliance in all reports, and keep current with changing rules through continuing education.

Compliance involves an initial two-day 15 hour class (including exam), and a 7-hour update class every two years. Whether or not you need an appraisal that will be reviewed by the IRS, full USPAP compliance along with affiliation with a professional appraisal association are the truest indications of an appraiser’s seriousness and professionalism.

Does it always have to be such a big, costly deal? 

Absolutely not.

Not every appraisal has to be a ponderous, weighty process. Sometimes you may only want to know if what you have has any value before deciding your next step. Your appraiser should be willing to consult with you freely for item identification or value discovery.

Next up: Value Discovery

Appraisers Solve Problems!

You have stuff. Some of it has been given to you by grandma or other family members. Some of it has simply accumulated through the years. Maybe it’s an entire collection of things. You like some of the stuff. Maybe you even like a lot of it. But some of the stuff fills you with inertia. Unfortunately, some of it is a downright annoyance.

You’re pretty sure there’s value in some of it, so there’s one looming question: 

What am I going to do with it?

Sure, you’ll find somewhere to put the stuff you really like, but is it stored correctly and adequately protected by insurance? You’re not absolutely sure? Well, don’t worry -- that’s quite normal.

An appraiser can help you separate the ‘wheat from the chaff,’ and outline options before your next step, based on your unique situation. Whether your ultimate goal ends up being selling, scheduling insurance, making a charitable donation, or something else, your appraiser will be able to provide valuable information that will help you make an informed decision and protect yourself and your heirs from future unknowns – near or far.