Most people have little idea of what to expect when it comes to an appraisal process. Factors such as why you are appraising, if you need it for replacement, and gross misconceptions from what is shown on TV can, and many times DO, put the consumer at a disadvantage when it comes to making the most of their assets.
This article, reprinted in full with permission from the author, opens up with some great information on how you can make the most of your personal property and prized possessions.
Note that the author is David S. Bunton, guru and leader within the appraisal profession, and he has our thanks for sharing this great information.
As the article tells, it's simply smart to take the time to really look at your appraisers resume and see what experience they bring to you in valuing your assets. For the BKR Appraisers resume's (based in St. Louis, MO) you can see Rick Bauers here, and Richard Kloeckeners here.
President, The Appraisal Foundation
What You Need to Know When Getting Your Personal Property Appraised
Posted: 10/27/2015 3:29 pm EDT Updated: 10/28/2015 6:59 pm EDT
There are many instances when you need to have your personal property or collections appraised, including before a potential sale, for insurance purposes, settlement of an estate, or even to donate an item to a museum. Whether it is your grandmother's antiques in the attic, your parent's estate, or the autographed baseball from your childhood, a personal property appraiser can help you understand the value of these objects.
However, there are several important considerations to keep in mind when getting your personal property appraised. The below guidelines will help ensure that you fully understand the process and that you hire the most appropriate appraiser possible.
Appraisers don't pull
valuations out of a hat
While it can be fun to imagine an appraiser staring into a crystal ball when performing a valuation, the reality is that appraisers rely on a substantial amount of research, expertise, and experience to arrive at a credible opinion of value for an object. First and foremost, appraisers rely upon the Uniform Standards of Professional Appraisal Practice (USPAP), the Congressionally-authorized standards for real estate appraisers and the widely recognized standards for personal property appraisers. Appraisers most commonly look to past sales of similar objects to determine the value of an item. In this approach, an appraiser will find similar objects to the one he or she is valuing, and then account for differences based on a number of factors, including each of the item's importance, quality, condition, rarity, desirability, and provenance. Based on these differences, an appraiser can begin to place an object into a hierarchy of value and ultimately arrive at a final valuation.
Different circumstances call
for different values
Believe it or not, the value an appraiser places on an object partially depends on the purpose of the appraisal. For example, if someone is getting an appraisal for insurance purposes, an appraiser will value the object based on its replacement value, which is how much it may cost to replace the object within a reasonable time period. In contrast, a donated object valued for tax purposes will require a fair market approach, which looks at how much on average the object would sell for on the open market. Typically, a valuation for the purposes of insurance will be higher since the cost of replacing a specific object can be quite high and above the potential market value, especially when the item is unique.
The appraised value of an item
does not mean it will sell for that value
The appraised value of an item is often different from the amount it sells for, whether on the open market, online, in an auction, or elsewhere. This is because there are additional factors at play. Let's take, for example, a high-end auction of rare collectables. In this instance, bidders may feel an extreme emotional connection to the items on auction, and as a result will be willing to pay more than the market value, driving up the sales price. A buyer is also often responsible for selling costs, fees, and premiums, which can further increase the sales price. On the other end of the spectrum, some items may be overshadowed by featured items during an auction. This can prevent potential buyers from recognizing the value of those objects, allowing a savvy buyer to step in and make the purchase at a below market value. This can also occur when there are many similar objects on sale at an auction, which lowers competition among bidders for those items and can also lower the sales prices.
You may also need an
A competent appraiser will certainly review and research an object's history and will indicate if he or she believes further authentication is needed. There are experts who do authentication for a living and work with appraisers on a case-by-case basis.
Appraisers charge for their
After watching Antiques Roadshow or similar shows, one might mistakenly believe that appraisers offer their services free of charge. However, appraising is like any profession and appraisers need to charge for their time and expertise. If you hire an appraiser, you can expect to pay on average between $100-$300 per hour, depending on the particular project and level of expertise needed.
Pick the right appraiser
Given the sheer diversity of what constitutes personal property, the need for specialists with expertise in specific areas such as, collectables, jewelry, fine art, and machinery is essential. Just turn on "Antiques Roadshow" any given night, and you will see that there are numerous specialized appraisers, from posters to pottery. When seeking out an appraiser, make sure that the appraiser has the appropriate experience, expertise, and qualifications for the project. Always ask for an appraiser's resume to review their credentials for the particular project.
Know where to go
There are several appraiser membership organizations that can be easily accessed online where you can find a qualified and competent personal property appraiser, including the Appraisers Association of America, International Society of Appraisers, and American Society of Appraisers. Members of these organizations have fulfilled rigorous qualification requirements set by the Appraisal Foundation. When using these sites, one can search for appraisers by both category and location.
Notice: 2015-11-18 Mr. David S. Burton granted Bauer Kloeckener Roses Appraisers full reprinting permission for the posting of this article.