An Auction Result is Not an Appraisal!

Auction results are a large part of the data an appraiser interprets to for their value conclusion – but they are far from the only thing!

In any first consultation with me, a client identifies the intended use of the appraisal, and together we determine the objective. These two things help me determine the most appropriate market or markets to search for sales and pricing data, whether for comparable sales, or prices of like items or reproductions.

The most appropriate market is where the items are most commonly bought and sold by buyers and sellers in full possession of all relevant facts about the items and under no compulsion to either buy or sell.

On top of all this is an item’s physical characteristics, and often enough in my corner of the appraisal world, a provenance that establishes additional historical significance. Both can have an effect on value.

So you see appraisals are a multi-faceted process with many moving parts! It takes a mind adept at compilation, interpretation, and interpolation of data to reach a justifiable value conclusion – far more than a simple search of realized prices!

3 Easy Tips for Appraisal Preparation

Contrary to the image given appraisals by programs like Antiques Roadshow, professionally written appraisals are very serious documents. They are products of diligent research that must respond to myriad conditions and circumstances, all of which are processed by the appraiser.

The true professional appraiser spends considerable time and effort keeping up their credentials by constantly pursuing continuing education – on top of the time they’ve already put in that gives them expertise in a given field.

Appraisals may serve as evidence in a court case, or as documented support for an insurance claim. They may be the go-to document for a family wanting to split up an estate fairly and efficiently. I’m sure you can come up with other very serious uses for an appraisal.

‘You get what you pay for’ is the philosophy at work here.

All the same, there are ways a client can help expedite the appraisal process and save themselves money. As with most things in life, the best way is by paying special attention to the organization of the items under consideration.

Clients regularly ask how we can streamline their process to both expedite the final product and save themselves a bit of money. Because I too want the process to go as smoothly as possible, I offer the following tips:

1) Organize the items to be evaluated in a well-lit area that provides the inspecting appraiser a 360-degree view of the items, including room to tip large items to view the undersides or backs.

For fine art, it may be necessary to remove an item from its frame. Fine art appraisers like myself are knowledgeable about this process. When it comes to fine art, bear in mind that the frame rarely adds value to the work itself, so don’t worry about it being removed briefly from its frame. Appraisers are adept and removal without compromising the frame.

Having the work secured back in the frame is usually quite painless. If the back of the frame is sealed by a large sheet of paper, it may be that there is an attempt there to hide something that will significantly impact value, and appraisers must be sure of all aspects of your piece before rendering a trustworthy value conclusion. This is for your own good, as they say!

2) Talk to your appraiser about cleaning up the items before the inspection. This is an important step because there are some kinds of items whose value might be harmed by cleaning, such as things with confirmed historical importance, and your appraiser will surely tell you not to touch a thing.

Your appraiser should also be able to offer you handy tips for safely cleaning up your items in a way that will make them look their best, no matter what their condition. Even if cleaning up something means exposing a flaw, it should be done. Believe it or not, the flaw may actually add value to a piece, but in the end what you want is an accurate valuation of the item in its current state.

3) Gather any provenance beforehand, that is to say, formal documentation of an item’s journey through the past, such as its gallery or show appearances, loans or displays in museums, and any previous sale documentation whether auction or private. These documents may well save the appraiser time by helping streamline the research process.

But don’t panic if your item doesn’t have any of these things – absence of provenance is more common than you might expect!

So there you are! Three easy things you can do that can save you money and help your appraiser produce the most accurate appraisal document possible!

Antiques Roadshow: Reality Stick Edition

Antiques Roadshow is a very popular program with many of my clients. For my own part, I appreciate how the show traces the history of an item and contextualizes it with value.

The downside is that often I encounter people with the expectation that because their item is old, it just must have excellent monetary value.

Explaining reality - especially when disappointing - is itself an art form, and appraisers must be adept at it.

Here’s an example of expectation meeting cold, hard reality. I’m not sure the UK Antiques Roadshow appraiser was quite ready for the man’s reaction...

Condition is King!

In real estate, it's all about location, location, location.

In personal property, it's condition, condition, condition!

Rare Books: Stewardship from Start to Finish

Defining ‘Rare Book’

Book collecting is very much an act of faith. The general state of this field has long since shifted from what you could afford to buy to what you can find to collect that is in an acceptable condition. What hasn’t seemingly changed is that to be a true collector, one must always be short on funds.

On the face of it, book collecting seems a noble and straightforward idea. Increasingly though, it is one that is often overly concerned with tracking down aging rarities.

This at-a-glance article will attempt to define common terms and give the reader the 'lay of the book collecting land' - from the collecting process to the final distribution of a collection.

Assumptions and Actuality

A general assumption people make upon hearing someone is a book collector is that they only pursue ‘rare books.’ The great variable in this assumption, however, is that ‘rare’ can mean several things. The wise librarian and collector know that all old books are rare in some sense. Each has a place in the intellectual history of its time and none should be neglected. Similarly, the bibliographer approaches all books in a library as if they were rare.

The whole history of book collecting consists in attention being drawn to a book or books, or to some feature that had previously been overlooked. Yet for appraisal purposes, there are ways to define ‘rare’ that are reflected in the open market.

Of course, rare books may not always be beautiful. Age is a very important factor – yet it’s vital to remember that the age of a book is primarily one of degree and one in relation to an edition’s rate of attrition and recognizable distinctions. Quite often, beautiful old books, i.e. those with impressed boards with gold or other color illustrations, may not be prized by the market at all. This is often a terrible shock to descendants that have inherited them and simply assume beauty equals monetary value.

Another important aspect, depending upon the type of appraisal being done, can be a book’s intellectual value. In some fields, it may nearly be impossible to draw a meaningful line between antiquarian books of research interest and rare books proper.

Paradox

Ultimately, a ‘rare book’ that holds no public interest has little monetary value. Paradoxically, monetary value tends to make rare books more common because the more valuable an edition is, the less likely it is to sit unnoticed on a dealer’s or collector’s shelf. In other words, one likely won’t have much trouble locating a rare book even if affording it be another matter entirely.

Intellectual value and its subsequent effect on monetary value tends to be much more difficult to define and usually requires a diligent and exhaustive justification.

Books that were published in special editions are often initially expensive and therefore preserved very well. Naturally, this means the rate of attrition that otherwise makes volumes rare in number is, in this case, glacial. Also, the number of copies printed may not reflect the actual number of copies bound and sold. It may be nearly impossible to determine how many copies are actually in circulation of a given title.

Another overlooked aspect is that later editions of a work may have a bibliographic importance equal to or greater than a first edition! What this means is that dedicated collectors forming a comprehensive author collection will gather the widest range of editions and impressions possible, which when examined will provide a unique window to textual changes.

How to Build a Desirable Library

Twenty years ago there was talk of the collapse of the printed word. We now know the reports of such a death were greatly exaggerated.

A quick scan across Internet platforms like eBay and Amazon reveal a lively and consistent trade in books, and the publishing industry continues to move forward apace. There is even a trend toward more brick-and-mortar bookstores.

A focused collection that tackles a single subject, often inexpensively when considered per piece, can have considerable value both intellectually and monetarily. This is because much of the material may have been ephemeral and will find its ‘highest and best use’ by historians, libraries, and archives, and gains monetary value from what appraisers call ‘the collection effect.’

Keeping an Asset from Becoming a Liability

I’ve recently worked with a couple of clients that have been left a remarkable private library or archive built by a dear departed one. The struggle is with how to liquidate the collection in a way that benefits the heirs, is respectful of the late family member’s wishes, and also conforms to market realities.

Generally, the best route in these cases is donation to a library, archive or other interested non-profit institution. Once interest is assured by one of these institutions, an appraisal of the collection is conducted, and the value conclusion figured into the estate’s tax calculation for credit when combined with the receipt from the donee. I provide the necessary paperwork to expedite that part of the process.

If the collection’s theme is varied, there are other options which I can help navigate in order for the client to confidently take their next step and keep the asset from turning into a liability.

Whether you have ten books or ten thousand, give me a call and let’s get started.

“Pretty Sure I Have Enough Insurance”

- a statement that invites heartbreak.

As the U.S. economy recovers, I’m hearing from more and more clients who have realized their home owner’s insurance would not adequately cover damage or loss of their items or collection.

Others are aware their things do or probably do have value but are seeking a professional evaluation to help determine the level of coverage needed.

Still, others have inherited things which carry assurances of value from the departed family member – but curiosity lingers alongside the awareness that these things should be insured.

A big part of my business is helping these three types of people. It is also highly rewarding for me personally.

Almost every time we find a hidden gem, or at least something truly surprising. It could be an item that carries some previously undiscovered historical component. Or it could be an item everyone assumed had little value but actually had significant value!

Let’s not take any chances. Give me a call and let’s discuss your situation and needs!

Klimt's "Bauerngarten" - A $59m "Trump Effect" Barometer?

Last month, I profiled the growing popularity of Gustav Klimt (Austrian, 1862-1918) among art collectors, along with the role one of his works has played in post-WWII art restoration.  

The inspiration was the excitement surrounding the offering of Klimt’s Bauerngarten (Blumengarten), painted in 1907 near Lake Attersee, Austria, in the March 1st sale at Sotheby’s, London. The pre-sale estimate topped $45 million.

Animating the excitement - and set against a contracting market throughout 2016, was the hope, or some would say perception of a renewed optimism in the rarified air of the high-end art market, which has come to be known as the “Trump effect.”

Well, Bauerngarten did not disappoint, realizing $59 million with the buyer’s premium and other fees. It was sold to a German-speaking telephone bidder, one of four telephone bidders in fact, with two of the others thought to have been Asian collectors. 

Sotheby’s had purchased the work before the auction from its previous owner, David Graham, and the sale was guaranteed by a third party’s ‘irrevocable bid.’

Complex arrangements like this are more common today, deployed to pull higher value works to the open market and away from private dealers who obviously represent an existential threat to international auction houses.

And not only was Bauerngarten a successful sale, but the strength of realized prices across Sotheby’s entire $239 million auction, alongside a sale at Christie’s the night before pointed to a confirmed sense of investor confidence in the art market.

After the sale, the co-head of Sotheby's Impressionist & Modern Art Department and chairman of Sotheby's Europe, Helena Newman, declared the evening "a statement on the momentum of the global art market in 2017."

Professional Jewelry Appraisals Have a Home in Kansas City!

The phone rings. The voice on the other end is tinged with exasperation. “My family is working through my late mother’s estate. She’s got lots of antiques and a lot of regular stuff, too. And jewelry. Lots of jewelry. We’re a little overwhelmed trying to figure out what the value on it all is before we decide what to do. We really need help.”

While I can help with much of the estate, there is a group of things outside my areas of expertise - jewelry. And for just this sort of eventuality, I maintain a network of appraisers that specialize in areas outside my own. These I can either pull in to complete a part of your appraisal or simply refer you to them. Always depends on the client's unique situation.

And speaking of jewelry, I recently interviewed friend and fellow personal property appraiser Tracey Kahle of Kahle Appraisals in Overland Park, Kansas. Her specialty happens to be, guess what? Jewelry! We discussed what appraisers do, how they do it, a few misconceptions regarding jewelry and jewelry appraisals, and how you know you’re getting a worthwhile appraisal product. Read on!

Introduce yourself! Tell us about your background and the kinds of appraisals you conduct.
My name is Tracey Kahle, of Kahle Appraisals. I have 28 years of experience in the jewelry industry. I’m a graduate Gemologist from the Gemological Institute of America and credentialed with the International Society of Appraisers. I provide appraisals for various uses, from insurance to damage claims to equitable distribution of assets, divorce settlement, collateral, estate taxes, charitable donation, and more.


How would you describe what an appraisal is? Are there misconceptions?
It is truly a mystery for most just what an appraiser does. Many think value can be defined immediately even without a thorough inspection or examination, but it’s more complex than that.

Essentially, there are three steps, the first being examination. In this step, I determine the jewelry type, including defining precious metals and gems and authenticate designers or makers. The second step is value research. I examine appropriate marketplaces to determine what values for each piece – an appropriate marketplace being defined as where at item is most commonly sold between a knowledgeable buyer and knowledgeable seller, both in full possession of all relevant facts surrounding the property and both under no compulsion to buy or sell.

Anyway, these marketplaces could be databases, individual vendors, or auction houses, simply depending on the situation. Depending on the intended use of the appraisal, I will search both retail markets, which we consider primary and secondary markets such as auction houses.

Do you find clients confuse an appraisal with an authentication?
Yes, they really do - but appraisals are not authentications at all. While appraisal work is based on readily apparent identity, I won’t conduct an appraisal if I’m not sure about the qualities or composition of an item. If necessary, like when it will have an impact on value, I seek out other experts to authenticate the item before doing the appraisal.

What is USPAP and why do appraisers make a big deal out of it?
I work within the USPAP (Uniform Standards of the Professional Practice) guidelines. USPAP protects the consumer from any type of bias the appraiser may potentially have. USPAP also means that the appraiser is bound to operate without any predetermined result in mind. So essentially, USPAP embodies a higher standard of ethics. As people who buy and sell real estate know, real property appraisers are also bound by USPAP.


Why is it important that an appraiser not work on a contingency basis?
A contingency is against the principles of USPAP, and means one is expecting a certain outcome before any type of research is conducted. Paying an appraiser based the outcome of the appraisal is absolutely unethical, and it’s pretty easy to figure out why.

What is the most common form of appraisal you’re asked to conduct in jewelry?
Insurance coverage, easily. Clients are usually seeking to acquire a scheduled policy for their valuables.


Do insurance companies just accept the appraised value?
I do replacement values for if the insured had a loss. The insurance company can negotiate the level of coverage with the client individually, and they’ll use my appraisal as the bedrock.


How often are a client’s assumptions about their property wrong and how do you correct them?
About half the time. They could believe their jewelry is more or less valuable than the appraised value. More often than not, though, a client has received a piece of paper at the point of purchase with an inflated value. Unfortunately, clients can pay inflated premiums because of that over-inflated value, so you can see where having a professional appraisal done can actually save you money!

Once they figure out the value is inflated, are they ever disappointed?
Many times I’ve been questioned about why the original stated value was so high! My response is based on the simple fact that I cannot speak to the documentation behind that high value, or what it was based upon. But my appraisal work is based on current values, accurate and up to date, researched through industry-recognized marketplaces and databases.


What should one look for in an appraiser – is credentialing important? What sets you apart?
Unlike real estate appraisers, personal property appraisers aren’t required to be licensed. This means anyone, regardless of your level of experience or education can present themselves as an appraiser. But as a professional, I base my credentials on my GIA graduate experience, along with ISA’s appraisal methodology and report writing, and sought credentials through the ISA.

How much education goes into being a credentialed appraiser, affiliated with a professional association?
ISA requires 500 hours of experience in your particular field. They also require recertification every five years. This ensures the appraiser is up to date on necessary requirements and changing laws.


Let’s say I want to become an appraiser. What advice do you have? Where should I start?
The best way to start is to educate yourself in the field you plan to appraise. Get experience in the field buying and selling. Retail can be helpful because it allowed me to first gain experience selling the product. I also spent many years buying on the wholesale level. I have friends and colleagues that work in the auction market that I can rely on for information. After that, I recommend you join a reputable appraisal association that embraces USPAP on top of rigorous report-writing standards. This will inspire confidence in your clients and respect from fellow appraisers!

For more information on appraisals by Tracey or to schedule an appointment, go to www.kahleappraisals.com or call her at (913) 912-9122!

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!