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!

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.

What's the Most Valuable Thing...

Every so often I'm asked about the most rare and valuable item or collection I've evaluated. Was it Saddam Hussein's uniform? The archive of Joseph Conrad letters? The Civil War library? Pre-Columbian stone artifacts?

Well, that's a rather difficult question to answer.

There are different approaches to concept of value which makes the question unanswerable without more detail. An item might hold immense intellectual interest and value but also have little monetary value. While this might seem paradoxical, it's really quite easy to illustrate.

Take the subject of rare books. Librarians may view all books as rare, and we should not blame them for the habit. Each book reflects an aspect of the intellectual history of its time. And over time, naturally, there are fewer and fewer copies of any book that is no longer in print.

Ultimately, a rare book that holds no interest really and truly has little monetary value.

Just because something is old or considered uncommon does not mean it automatically has monetary value.

However, while a single volume may not hold much monetary value, a collection of books on a common subject can have significant intellectual and monetary value. Why? Because while the individual volumes may have been considered ephemeral, a collection on the subject finds its highest and best use by historians, and value is increased by a condition known in appraisal circles as the "collection effect."

So, collect what you love. Collect what interests and inspires you. Don't be distracted by the discovery of individual rarities.

Remember that the more imaginative your topic, the better the chance your collection of reasonably priced individual items will rise in value over time.

Personal Property and Peace of Mind

In 2014, Consumer Reports published a handy flow chart outlining the process of dealing with personal property, or what they called “stuff.” And at the very top, directly beneath the first item, what do we find? “Get an appraisal.”

Seems simple enough, right? One of the more frequent calls I receive involves folks with “stuff.” Yes, stuff. But often they are unsure of what this stuff is – let alone its worth.

Sometimes the caller is managing an estate of stuff left behind by a relative. There may be other family members involved in overseeing its administration. Sometimes the family is in no hurry to deal with the stuff, other times the stuff has become an albatross, a time-sucking personal property stuff vampire that has raised tension between family members and just needs to be dealt with as swiftly as possible.

Other times it may be stuff the individual has collected but are now unsure of value. They know what they paid for the stuff, but they also (rightly) suspect that doesn’t really mean anything anymore.

Sometimes grand tales have been appended to the stuff, and a client is curious what effect it might have on the stuff’s desirability.

Of course they’re understandably hesitant during the call because they really don’t want to pay for a formal written appraisal on stuff that just isn’t worth it. And why should they?

In short, when they call me, they’re really looking for assurance and protection. They want to know they’ve done due diligence regarding the stuff by finding a professional to assist with discovery and identification.

They’re tired, overwhelmed, intimidated, or generally confused about their next step. Happily their challenge is not as big or daunting as they might believe!

My goal in this phase is to arm my clients with knowledge, perspective, options, and ultimately, peace of mind. I provide information about the items that will help the client with resolution, so they can confidently take their next step with the property, whether that involves liquidation, donation, equitable distribution, personal accession, or some other eventuality.

Now, appraisers like myself that work to maintain membership in professional appraiser associations like the International Society of Appraisers (ISA), American Society of Appraisers (ASA), or American Association of Appraisers (AAA), are “cap specific,” that is to say we define our role in any situation very precisely.

If I am acting as an appraiser, I am bound by a very specific code of ethics that does not allow me to wear multiple caps at once. For instance, I cannot be an authenticator and an appraiser at the same time. The conflict of interest is, I think, obvious. If you call an appraiser that offers to do both, hang up.

So, how are my services different?

As outlined above, I may serve as an appraiser or a consultant. As a consultant I can freely inspect a client’s stuff and search for pieces that might have a value worthy of further consideration, judged by whatever criteria the client has outlined. The reasoning may have nothing to do with monetary value.

What the client stands to gain from our association is security, confidence, peace of mind, and knowledge. The cost for this type of service is considerably less than a formal appraisal, and in some cases can even be credited toward a formal appraisal of items the client already had in mind, or have discovered along the way.

Is Donation Right For You?

Going back to the flow chart, one area that is underemphasized is charitable donation. This is an avenue that clients often find serves their interests more effectively than worrying over marketplaces they’re unfamiliar with.

Having worked the auction side in the past myself, they’re almost always up front with how afraid they are that an item being sold at auction for less than they believe it is worth, but they don’t have the time or patience to micromanage a consignment shop situation.

The fastest solution for these clients is to use the inspection process to:

• Discover the stuff they want to keep.
• Identify the stuff having what they deem to be significant value – again often regardless of monetary value.
• Consider the avenues for donation according to the highest and best use of their stuff.
• Order a USPAP-compliant donation appraisal on the remaining stuff for tax relief.

Now that we’ve worked our way through some options, let’s figure out what appraisers mean by USPAP-compliance.

If you’ve bought or sold a home, you have probably heard the property appraiser mention USPAP. This is because both real property and personal property appraisers use the same basic standards during the valuation process.

Now, we know risks associated with personal property are mitigated by having a formal appraisal. It follows that appraisals are vital to obtaining accurate and adequate insurance coverage, settling a claim, helping determine estate tax liability, documenting a charitable donation, aiding in equitable distribution, or even just in preparation for resale.

The fact is, more and more people are realizing, sometimes too late, that their basic homeowner insurance policies is not enough to cover their collection of antiques, artwork or artifacts. Other times items are shrouded in mystery and folks are simply curious about what they have, especially inherited pieces thought to have historical significance or special value. Accurate identification and valuation is vitally important because it almost always determines your next step in protecting the property.

You may have already had an appraisal on items, but the report is more than five years old. A updated report not only protects you with more accurate current numbers, but I am often able to append an even greater amount of detail and historical perspective to your items that will serve your future generations when they look back on the family heirlooms, as well as ensure that they will not be fooled by unscrupulous selling agents or auctioneers that might otherwise want to take advantage of holes in your knowledge about your own items.

But not all appraisers are equal!

There are three main professional appraisal associations operating in the USA, the International Society of Appraisers, the American Society of Appraisers, and the American Association of Appraisers. Members of each association are held to the highest standards and continually work to maintain their credentials within their association. When you do finally choose an appraiser or consultant, be sure they are a member of one of these three organizations.

You will hear those of us that are part of these professional appraisal associations talk about “Uniform Standards of the Professional Appraisal Practice,” or USPAP.

What are these standards and why are they important to an appraisal?

Think of them as quality control standards for appraising both real estate and personal property. In the United States they are administered by the Congressionally-authorized Appraisal Foundation. The IRS requires appraisals for their use to be USPAP compliant. Appraisers that are members of reputable associations like the ISA are required to maintain USPAP-compliance.

Whether you need a formal or verbal appraisal, or just basic advice, USPAP compliance is the truest indication of an appraiser’s seriousness and professionalism.

Create your own file or database with an inventory and photographs of your personal property. Include your original receipts and any pieces of provenance, no matter how seemingly small or insignificant. These can provide clues or act as evidence to a future appraiser that might help your valuation. Inspect your items frequently, and call a professional if things don't seem right. 

If you have an artifact, antique, artwork, rare book, general collectible, or even an entire estate filled with different kinds of “stuff” – give me a call at (816) 289-5400 or send me an email, I’m ready to help!

For more information on USPAP, see my website: www.charleskeller.net