American Society of Appraisers

The International Society of Professional Valuers

Home      mark@mgrove.com   (434) 964-1403 EST

Email Your Question to Mr. Grove!

If it is a General or Specific Question that Would Benefit the Public at Large, then it will be Posted to the FAQ List for All to Read. 

~ FAQ ~

(and questions not frequently asked)

          Q: Last December, the Abby Aldrich Rockefeller Folk Art Museum was given the woodcarving shown in the attachment. It was exhibited here (along with 8 other carvings by the same artist John Doe) in a one-man show in 2001-2003. The donors are trying to get an appraisal done for 2007 tax deduction purposes. Is it possible you can provide a figure, informally, verbally, and --- at this point --- without commitment on their part? Other potential appraisers have suggested, in one case, $5600 and, in another, a figure in the $6500-$7500 range. The donors had been hoping for something more substantial. I have to agree with the donors that the above figures seem low in relation to the piece’s complexity and artistry, its exhibition history, and the mountain of biographical information they uncovered on the carver. (Some of this bio is alluded to in the text attachments, but there’s more here, such as transcribed interviews that the donors conducted with people who once knew the artist). The sticking point is that the only two John Doe carvings I know to have sold at auction went for $518 and $1,495. Are you aware of any others? If you think you could render an appraisal for a higher figure for IRS tax deduction purposes, please let me know.

             As an accredited member appraiser of both the American Society of Appraisers and the Appraisers Association of America I cannot utter a numerical conclusion without the Uniform Standards of Appraisal Practice being invoked. It would be a violation of the USPAP, ASA, AAA, the Appraisal Foundation, and the IRS if I even alluded to a conclusion before the necessary research was concluded in order to substantiate the valuation. Asking for a conclusion beforehand could be construed by a fundamentally principled professional appraiser as an attempt to coerce a desired result. That being said, no, I have no idea what this carving is worth in the marketplace until I do the research. Any conclusion must be substantiated. Any IRS donation has the potential for close scrutiny. Any appraisal assignment has the potential of ending up in Tax Court which is one step below the U.S. Supreme Court. Any proven overstatement by an appraiser is a violation that can be punished with a 20% fine and revocation of the appraiser’s privilege to practice before the Commissioner.

Every report that I render is researched and written as if it were scheduled to go before the Court. Conclusions are air-tight and substantiated with overwhelming evidence in order to satisfy a rational mind. Donation appraisals assignments are inherently the riskiest of the various types of professional engagements and therefore they are more time-consuming and thus more expensive. If your research indicates the potential for a very low valuation, perhaps the cost of an appraisal report is not justified. Non-monetary donations under $5k do not require an appraisal. Maybe that is the best route to travel.

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 Q: I have donated to more than $500 worth of stuff to charities this year. What form must I use to satisfy the IRS'?

          You'll need to consult with your tax advisor or read the rules because the rules change with the wind, but at this time it is IRS Form 8283. If you donate more than $5000 of non-monetary property you'll also need a written appraisal report rendered by an accredited member of a major appraisal society or someone with equivalent credentials.

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The following occurred over the course of several days via email to Mr. Grove from someone out of the blue. It was such a good question that Mr. Grove passed on the dialogue to the other professional Members of the Richmond Chapter of the American Society of Appraisers and to the Regional Governor for the Chapter. The result was an excellent example of professional networking.

Q: I am a consulting arborist.  I sit on the Council of Tree and Landscape Appraisers, a council of representatives from the "green industry" that writes guidelines for the appraisal of trees and landscapes.  We are currently working on the 10th edition of our Guide for Plant Appraisal. The primary thrust of tree appraisal is to treat trees as personal property, when appropriate, and appraise with a cost approach.  A depreciated replacement cost method is most used.  We have the mechanics down pretty well after nearly a century of progress.  The Council is now trying to get arborists to understand more about the greater world of appraisals. My question regards the use of premiums.  Can we assign premiums to the appraised property to raise the opinion of value?  For example, I appraise a tree in Mrs. Jone's front yard, and determine a value based on the usual characteristics.  Across the street is an identical (for purposes of discussion) tree in a city park.  The park tree has local historical significance.  Local residents regard it highly.  Not so for Mrs. Jone's tree. If I use the same approach and method to appraise for each tree, I will get the same result.  Yet the park tree would seem to carry a higher value.  I recognize that "value to whom" comes into play, but I'm not sure how I would factor that in. So back to the question:  is there a way to add a premium for some special significance?

          This is an interesting value question, one that I haven’t been asked before, but not unlike the value attribute of celebrity.

        To illustrate the attribute of celebrity let's use two physically identical cookie jars. One jar is offered at auction without provenance. The other is offered at the same auction house at the same auction sale but with an Andy Warhol provenance (this scenario really happened!). The difference in the two hammer prices would be the “celebrity” premium if indeed there is a difference (and we know there would be), if argued clearly to a reasonable mind. One such example would not be enough to draw a conclusion. The "premium" will vary between cookie jar forms (e.g. plain, figural, etc.), between cookie jars and other types of Warhol properties (e.g. furniture, etc.). With persistence one might eventually collect enough data to draw a conclusion as to the average percentage Warhol-anointed properties have; however that percentage would not be universal. Other celebrities will have a different perceived premium. Furthermore, each celebrity premium will fluctuate due to market forces the very same way that the stock market fluctuates, both up and down.

I cannot imagine that the Replacement Value of a park tree would be anything other than the total cost to buy and plant a new replacement tree of the same species, age, size, gender, etc., including, of course, a continued maintenance policy (watering, fertilizing, etc.) to assure that the tree survives for a realistic duration (five years?).

But, if an individual park tree were associated with and was benefited by a provenance that lent added value, then one might successfully argue that the tree’s interesting past provided celebrity (and added value) to the tree, as with the Warhol cookie jar. Perhaps the subject tree was once attacked by a future politician or maybe it provided a platform from which was hung a notorious ruffian. If a tree of such notoriety were damaged or removed, then an argument might be formulated to suggest added value. Whether the argument prevails or not is a matter for a Court to decide if there is a dispute. I suspect that the opposing side would argue that the tree is an element of the real property upon which it lives, and thus, is in effect real property. Or, it might be argued that a tree conveys with the real property, as would a major appliance. I am afraid my mind is much too practical a muscle for me to be able to stretch it in the manner lawyers extend the boundaries of reason.

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Q: When value is not equivalent to price or cost, how does an appraiser determine that difference in value?

Mission: justify the donation value (FMV) of the one-of-a-kind Petty trophy with comparable one-of-a-kind trophies from other sports celebrities. If there are no comparable records available for a specific type of property, then the appraiser can use a similar category, but there is an inherent weakness when using a substitute category; the appraiser's argument may be contested. For example, a Richard Petty trophy, which is one of a kind, for an IRS Fair Market value (FMV) donation. Substitute comps are necessary due to a one-of-a-kind-scenario; case attributes: one of a kind and celebrity ownership. Use substitute comparables: celebrity hockey player trophy, celebrity jockey trophy, celebrity Grand Prix racer trophy; all approximately of the same age and with the same target value as perceived by the appraiser (yes, we often know what the value is before we prove it with comparables). Take the average of the sum.

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Q: If I understand you correctly, you are saying that any premium or celebrity value is outside the purview of the appraiser, and rests solely with those who ultimately decide the value, such as judge, jury, or in the case of the cookie jar, the purchaser.  Is that fair to say?

Hmmm, yes and no. Usually the appraiser will be the one who assesses value based on existing comparables using a rational argument that any reasonable mind will accept, but when an unreasonable mind (i.e., IRS tax lawyer or a contentious spouse in a divorce case) is encountered, then the Court makes the ultimate decision of value by choosing between what the appraisers (from both sides) offer the Court. The Court decides, yes, but in effect the prevailing side's argument was based on what an appraiser concluded.

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Q: To follow this a step further, consider the historic park tree destroyed by vandalism.  If the appraiser cannot add a premium for its special status, can the appraiser offer or suggest a premium, not as part of the appraisal, but as additional value beyond the appraisal? 

Yes, in a courtroom drama. No, in a report. In a report only one numerical conclusion is rendered. The conclusion might include a premium but a USPAP compliant appraisal report can never have a numerical range. However, a consultation can have a range of values but a consultation cannot be used for any USPAP valuation purpose because it will not withstand scrutiny in a Court of Law. A consultation is tool no more important than a garden trowel would be in the construction of a bridge. An Appraisal Report is a legal document equivalent in importance to a Will.

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Q: How does the appraiser determine or estimate what that amount should be?   

By taking the difference between the ordinary and the extraordinary. All things being equal, if the difference at auction between the plain cookie jar and the Warhol cookie jar is a factor of 15, then one would use 15x (the premium) the ordinary value to yield the donation value (FMV).  ….Actually, we would have to use the retail price of the ordinary jar (not the auction price (FMV)) and compare it to the Warhol jar, assuming that the Warhol jar went to a retail buyer, which it probably would. Generally, those types of auctions (for Jackie-O, Warhol, etc., stuff) go directly to the retail buyers.

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Q: Is he [the appraiser] actually qualified to make that suggestion?

Yes. An appraiser with specialized knowledge would be the most qualified to do so. According to the recent (AUG 2006) Federal Statute, only "qualified appraisers" are now permitted to write "qualified appraisals" for tax and estate purposes as per §170(f)(11) of the Internal Revenue Code, and also the new § 6695A of the Code regarding substantial or gross valuation misstatements, as added by § 1219 of the Pension Protection Act of 2006, Pub. L. No. 109-280, 120 Stat. 780 (2006) (the "PPA"). ....All of this mumbo-jumbo is called HR-4 in case you want to just speak English to your friends. In a nutshell, gift and tax appraisals must now be completed by an appraiser with an earned designation from a major appraisal society, like AAA or ASA. Those silly letters after an appraiser's name now have the force of law.          ―Mark C. Grove, AAA, ASA.

>>>Additional info provided as a result of this dialogue being passed on to Members of the Richmond Chapter of the American Society of Appraisers and the Regional Governor. Our Societal Governor responds:

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     Q: Can you give them some suggestions on how to get appraisal methods evaluated by underwriters?

     My wife is skilled in Contemporary Hand Hooked rugs. A few years ago one of her guild members had several rugs stolen from her car and the insurance company gave her a replacement value of the value of the wool.  She was devastated.  She is highly skilled and the rugs were outstanding in quality, technique, design, and materials.  I had seen some of them at a show.

     My wife and another skilled “hooker” researched a bit and were surprised to learn that, unlike quilters, there are few, if any, professional RV hooked rug appraisers.  They developed an appraisal method based on quality of the wool. (Some artists dye their own wool using very complicated methods) material, original design with a detailed description of a rug piece; they carefully review the piece, take several digital pictures, and maintain a permanent file.  They follow USPAP guidelines. Both attended the American Society of Appraisers in Rhode Island and received a certificate for: SE100PP: USPAP for Personal Property Appraisers. 

     They charge a nominal fee and got started among women in their guild.  They have attended some shows/conventions and made presentations.  They have written a few articles.  Most people are supportive, but a recent article in one magazine while confusing RV and Market Value, essentially tried to make the case for each owner of a hand hooked rug to simply complete a description of their rug, take some pictures and keep personal records in case of loss.  The article reasoned that insurance companies will only pay your cost of wool, but maybe if you have a record, they may pay more. 

     My wife recently read where a quilt appraiser backed their appraisal method by saying: “Our appraisal method is approved by insurance underwriters.”

     That raised an immediate question in my wife’s mind. How can she and her partner find out if their RV appraisal method will pass muster with an underwriter?  I think it is quite thorough, but they don’t really want to wait until someone has a loss to find out how good it is, and if it will be respected by insurers.  One problem for the Contemporary Hand Hooked rugs is that most become family treasures and not (as of yet) many are sold.  I have seen many rugs and they range from beginners to highly skilled and sophisticated that will take your breath away.  The ones I have seen range from a few hundred to several thousand dollars.

    Thank you for the inquiry. I like to solve complicated valuation problems. Please understand that I cannot speak to issues of insurance, the law, or tax code, only valuation.

     Replacement Value (RV) will usually be what a comparable object sells for in the Client’s relevant market at the retail level without a discount plus associated expenses, i.e. freight, handling, tax, etc. However, when there are no comparable retail sales to support an RV conclusion, then the RV is what it would cost for the subject property to be replaced with a similar property made by a person with equal skills using the same quality of materials in the same manner – Replacement Cost-New. To base an RV solely on the basis of the cost of materials is an invalid conclusion.

     I have no suggestions on how one can determine what underwriters will support. That is determined by policy and contests brought before the Courts - usually, probably, eventually, hopefully. When things get out of whack, so to speak, then litigation erupts and decisions are made. Rendered judgments establish industry protocols that are incorporated into guidelines, for the insurance industry and for the tax code, as I understand it.

     Follow the USPAP literally and what was taught in the Core Courses, and take all four of them. Then take the 15 hour USPAP test. Appraisal reports are legal documents that are as important as a Will, and they become historical records over time. All reports must contain the 17 elements required by the USPAP. And any report written in a manner that does not stand up to legal scrutiny is a disaster waiting to happen.

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     Q: I am writing from Atlanta. I am going through a divorce and need an appraisal of artwork created by me during my marriage. The appraisal process is new to me and I need to know how to proceed and the costs. Do appraisers travel to assignments in distant cities? Can an appraiser appraise a group of drawings and paintings? Are unframed images, non-canvas works, and sketches defined as artwork?

     A divorce necessarily requires an appraisal with fair marketable cash values that are generally low; essentially what a subject property would sell for at a public auction, which is a fair market. Auctions are where many art dealers buy their inventory items for resale at the retail level, their galleries. The assigned appraiser will have to use demonstrated previous comparable sales of similar artworks in order to justify his numerical conclusions. So, if the properties that you expect to have appraised for the settlement have a history of sales, then those historical sales will be the basis for the appraisal. The historical sales might well have been only in galleries (retail), and if this is the case, then the appraiser will have his work cut out in order to figure what the artwork will sell for at auction (wholesale).

     Generally, the appraiser charges for his time and expenses. A partial advance payment is required before the process begins and the balance is required to be paid in full before the report is released to the client. If the assignment is large, then payments may be planned to stagger over time as time segments are completed, like a lawyer’s retainer. A few appraisers will travel long distances outside of their normal range.  

     If you and your wife are now living apart with jointly owned personal properties now in separate domiciles, then it would be a good idea to have one appraiser value both residences’ contents in order to simplify the process. Using one appraiser with one style, one plan, and one impartial opinion process is preferable. Although if there is contention and the two lawyers are at each other’s throats, then this may not be possible. Sometimes the lawyers make things more difficult than things aught to be, but if the two sides can agree on using one appraiser, everyone is better off and a great deal of money can be saved. Also, the personal property will not become an issue in Court because both sides have stipulated that the appraisal conclusions are not in contention. 

     Unlike lawyers, appraisers are not advocates. We are much like umpires; we call ‘em as we see ‘em regardless of the Client’s emotional issues. Our job is to identify what an object is and then witness that it indeed exists. In effect we are a third party that acts on behalf of both sides, i.e. the property owner and the insurance company, or whomever. 

     Any form of personal property can be assessed by an appraiser although no single appraiser knows every category of property. When a category is outside of an appraiser’s expertise, then he must either confer with a specialist or spend the necessary time to learn the new category. 

     If you have other questions, please do not hesitate to ask.

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      Q: I am writing from a law office in Bozeman, Montana.  We are involved in a lawsuit where an antique appraiser has appraised several antiques by simply looking at pictures or finding comparables at other antique shops.  This is because several of the items were destroyed or damaged when a gas line was hit and blew up their home.  I am looking for standardized techniques for appraising and a way to evaluate whether the techniques used to value the items are acceptable in the industry.  Any help you can provide would be appreciated. 

      There are many shades of gray in the scenario that you’ve described. I will assume that the Purpose is Replacement Value and the Intended Use is for an insurance claim. (Capitalized terms have significant meaning to the appraisal profession.) If the appraiser is accredited then these terms will have meaning to that individual. He/she will be bound by the USPAP regulations that promulgate these terms and professional ethics.

      Accredited appraisers must use comparable sales to justify a numerical conclusion.

      An experienced appraiser will know what many objects are worth for the various Purposes (fair market value, market value, liquidation value, etc.) in different markets (local, regional, national, etc.) and market levels (yard sale, flea market, local auction, regional auction, etc.) before discovering comparables. It is incumbent upon the appraiser to select recent available comps and footnote those sources (and retain the original source docs in his Work File). The argument that he makes for the numerical conclusion he renders per subject property must be based on the comps he selects.

      Now, here’s the sticky part: what if there are no comparable recent sales? Only very old sales? Or no comps at all? This happens quite often. For the lay appraiser or an older appraiser (usually a layman) he will be tempted to “wing it”, based solely on his experience, which might be entirely accurate, but maybe not. Without readily available comps he may be tempted to use his judgment instead of discovered comps. He may not even use the internet to find comps. If he doesn’t use the internet to find relevant comps, then he is not exercising due diligence and he is unquestionably vulnerable. Many “old timers” are walking legal disasters waiting to happen. There are a few in my neck of the woods, too. When they butt heads with an accredited appraiser in Court, the accredited appraiser usually prevails.

      Use of the internet is mandatory. Via the internet one can use databases specifically designed to assist appraisers; all it takes is money to subscribe. Below is an example of what a subject property description should look like:

Item 3  

Description: Works on paper, twelve silhouettes professionally framed, ca.1821, hollow-cut portraits of individuals in profile, some with embossed labels stating “Peale Museum”1, possibly created by the hand of Moses Williams (1777 - ca.1825)2. The images are purported to be of the individuals comprising a wedding party in Baltimore, Maryland on 3 MAY 1821. An upper center label in script states: “Wedding Party Mary Ann Tennent and Henry Ross Musser’s May 3, 1821 Baltimore Maryland”. Contemporary burl veneer wood frame, archival materials, matted, under glass.                                                                     

Sight Dimensions: 16 ⅝” height, 22 ⅝” width

Frame Dimensions: 25 ⅝” height, 31 ½” width

Provenance: Descended in the Client’s family.3 The silhouettes are purported to be of the individuals comprising a wedding party in Baltimore, Maryland on May 3, 1821. This is corroborated by information inserted into the family Bible, see Item #1.

Condition: Fine / professional housing, archival materials

Comparables: Silhouettes bearing the Peale Museum embossed label have strong demand in the marketplace, based on my experience, on recent observations in the relevant market, and on database comparables4.

RV: $10,000.00 The RV is not what you could expect to realize should you decide to sell it.                                

1Charles Willson Peale (1741-1827): Founded the first public natural history museum in North America in Philadelphia. Peale was also a founder of the Pennsylvania Academy of Fine Arts.

2 Peale is credited with helping a slave. “Of southern origins, he [Peale] taught a slave a trade, so he could buy his freedom. Moses Williams learned to create silhouettes, and stayed at the museum to cut these popular art pieces for many a visitor.” RE: http://www.coa.edu/print/pressreleases_34.htm.

3 Refer to the text box, page 5.

4 www.p4a.com. Retrieved three comps 3 OCT 05. The professional presentation, the provenance, and the novelty of having historically interconnected images collectively comprise approximately 40% of the assessed value.

     So, to answer your question: “Can an appraiser appraise several antiques by simply looking at a picture?” Yes, if the picture is of a property that has sold and the sales information (when, where, how, who) accompanies the photo. Essentially that is what subscription databases provide (www.p4a.com).

      Also, “Can an appraiser find comparables at antique shops?” Yes, he may ask shopkeepers what objects sell for and reference that source in the respective footnote and repeat that annotation in the Expert Pool of his report.

     Always glad to help allied professionals. Good luck.

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Q: What does a professional appraisal involve?

     A professional appraisal requires your cooperation and the appraiser's complete attention to detail in order to attain an accurate valuation of your properties. As a professional, the appraiser is required to exercise due diligence just like your attorney, CPA, or investment adviser. To satisfy Trust Officers, Insurance Underwriters, the Courts, and the IRS, a written report is mandatory. Reports for these officials consist of a thorough examination of each object, in-depth market research and analysis of comparable objects, and the preparation of a final report. In most instances, written reports include color digital photographs of your properties imbedded within the text of the report. Appraisers charge by the hour so it is in your best interest to facilitate the on-site work of the appraiser. To learn more about how you can help, click on this link —  "Preparation by the Property Owner Before the Appraisal." On average, for every hour spent on-site, two additional hours off site are needed in order to complete the report. Off site hours consist of research, analysis, writing, editing, digital photograph manipulation, report collating, and binding. The result is a printed and bound reference that the client can keep on file for many years to come.

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Q: Why can't you just tell me what it is worth and be gone?

     An appraiser must first know the Purpose and Intended Use of the appraisal: insurance, sales advisory, donation, etc. Only then can he advise you to what extent he must exercise due diligence. For Trust Officers, Insurance Underwriters, the Courts, and the IRS, reports must conform to the rules of the profession as required by The Uniform Standards of Professional Appraisal Practice (USPAP). These reports must be written documents and they have to be of the highest standard. It would be unethical and especially risky for an appraiser to provide unconsidered valuations of your properties if the intended use was official.

     However, there are legitimate intended uses that are not official when due diligence can be acceptably diminished in order to satisfy the limited and specific needs of the client; this would usually be for budgetary reasons, but not always. For example, when a client has an attic or barn full of miscellaneous junk that needs to be value-triaged. The appraiser can do a walk-through (no written report) followed by the client who has the job of writing down the on-the-spot assessments (no numerical conclusions) uttered by the appraiser: "trash bin, yard sale, flea market, local auction house, etc."

     It is important to note that not all appraisers are able to perform such a task because they lack the necessary experience. But it would behoove you to find an appraiser who is able to because advice should always be sought before throwing something away. You will likely come out ahead, and if not, you will have peace of mind if nothing else.

     It would be a shame to learn how much something is worth after you have destroyed it, wouldn't it?

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Q: How do I know that you are qualified?

     One of the first questions you should ask your appraiser is if he or she is a member of a professional society such as The American Society of Appraisers. Professional societies have stringent requirements for accrediting their members. Each society has a different program. The American Society of Appraisers has the most difficult program and it also is the most prestigious of the appraisal societies.

     Accredited members must complete an educational regimen similar in difficulty to a Master's degree program. They are tested in appraisal theory, principles, methodology, and ethics. The Board of Examiners of The American Society of Appraisers reviews their written appraisal reports. Members have to pass a Federal test called the USPAP (yoos-pap). And like many doctors, they are tested in an area of specialty of their choice, e.g., art or antique furniture, etc. Furthermore, as with most professions, members are required to satisfy a continuing educational program mandated by the professional society. All of this takes a vast amount of time and considerable resources.

     Is it worth it? Yes. You as the property owner can know automatically that a member with a designation after their name (ASA) meets the highest standards for professional appraisal service.

     Can't anyone place initials after their name? No. It is against the law and perpetrators are prosecuted just as they would be if they claimed to be a medical doctor. Look for the designation after your appraiser's name. Ask what it stands for and to which society he or she belongs. Also, look for the logo of the member's society.

     Logos can only be used by accredited members.

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Q: What are the rules pertaining to charitable non-cash donations?

     For non-cash charitable donations exceeding $500 in total value, IRS Form 8283 is required to be included with your tax return. A formal appraisal report written by a qualified appraiser certified in the Uniform Standards of Professional Appraisal Practice (USPAP) is required for non-cash donations of $5,000 or more. The report is kept on file by the donor if the amount is under $20,000. When the amount is $20,000 or more, the report is reviewed by an IRS panel of experts. Examination of your properties by a professional appraiser must be performed not earlier than 60 days prior to the donation date and not later than April 15th of the filing period.  The examining appraiser  is required to sign Form 8283 and may be subject to substantial penalties if the value conclusion is overstated. For this reason, it is imperative to secure the services of a professional appraiser educated in valuation theory, principles, and methodology. Professional appraisers are identifiers and witnesses, not advocates. They are required to be impartial and cannot charge on a percentage basis. Refer to IRS Publications 526 and 561 for the details.

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       Q: I am a member of a group of contemporary art quilters who exhibits work in a gallery where quilts are sold on consignment. The gallery takes a percentage of the retail price. Each artist is required by the gallery to provide a price for the work and an insurance value. It is my understanding that, in the event of loss, insurance value would be the amount that the artist expects to receive in compensation for the loss.  The question is what is "insurance value" under these circumstances? If, for example, the artist would receive only 60% of the sale price if the work were sold by the gallery, what effect does this have on an estimation of insurance value?  Unfortunately, as I am sure you know, artwork is stolen quite often from galleries.

     Insurance Value is more correctly known as Replacement Value. I am not an insurance agent and I am not an attorney, so I cannot speak with authority in these matters, but valuation is something that I can talk about.

     There is Fair Market Value (FMV) and Replacement Value (RV), to mention the two that probably pertain to the issue at hand. FMV would usually be the expected price an object would bring at auction (a fair market) and RV would be the value an insurance company would compensate a premium-paying client that has invoked their replacement policy. An RV represents a high retail price for a property in the client's relevant market (sometimes the object dictates the relevant market) and takes into consideration convenience. The client is not expected to shop around for a low-priced replacement after a loss; he/she would be expected to buy the first comparable that suits him/her, hence convenience and high retail. This is a normal scenario.

     My stream of logic begs the question "Was an insurance policy in effect?" If so, then the insurance company is to whom one must interact with. You may wish to engage council and he/she may suggest an appraisal when there is a loss.

     In your scenario, the RV would be the sticker price which also is the replacement cost to the gallery by the insurance provider, and the contracted percent (commission) would then trickle down to the artist, in my opinion. There probably is a precedent on the books for your situation that an able lawyer can discover although it will probably be for paintings, not quilts.

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      Q: I have a Shaker work table. What is it worth? People tell me different amounts.

     I understand your frustration. There are unethical operators in every sector but there also is more to valuing a property than one might expect. For instance, there can and are several different values for a single piece, always. The highest value is Replacement Value (insurance scheduling) and this value takes into consideration convenience. When a policy holder invokes a policy (secondary to a fire loss, etc.), he or she can then seek a replacement comparable to the original property in a brief period of time without the benefit of shopping around for the lowest price comparable. For this convenience, the policy holder pays a higher premium based on a higher priced replacement.

     Near the opposite end of the spectrum is Marketable Cash Value, one of the lowest values that can be assigned. This would be the price one might expect if one were to sell it in the marketplace at a low-end auction or in a yard sale. Both values are proper, ethical, and expected depending on the intended use. So, depending on what you want, whom you ask, and in which market you are, the valuation can and is different, always: there is more than one value for any given property. You said that you just want to know what it is worth. Ok. In review, there will be a range that it can be worth and this range can and will be broad. For insurance purposes it might be worth $100.00, for marketable cash value $40.00, for Fair Market Value $75.00.

     What I think that you want to know is the Fair Market Value for the Shaker work table and this is what it would likely bring in the most appropriate market. An appraiser can value it on that basis in a written report.

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      Q: How do you make an estimate?

      It is not possible to make an accurate estimate before examining your personal property. Ordinary assignments for insurance purposes of typically encountered antique properties, usually require two additional hours for every hour on-site, plus one to three hours per report for administrative tasks such as creating the various mandatory elements of a professional appraisal report. If the personal property items are out of the ordinary or if the report is for donation purposes, more time will be required in order to satisfy due diligence. It is usually not practical to have just one property valued unless its value is significant.

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     Q: Alright, so how much will it cost?

     Appraisers are not allowed to charge by percentage nor charge a fee contingent upon the sale of a property — this is the law. And it would be unethical to do so. Appraisers charge by the hour or by the day, the item, or the assignment, and it is customary to charge for ancillary expenses, such as travel, accommodations, printing costs, etc. The rate a professional appraiser charges varies widely depending on what the market will bear, your locality, and on his experience. Simply put, you should expect to be charged an amount commensurate with other professions in your area.

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     Q: What are the ethical considerations and parameters for appraisers?

     There are many ethical considerations and parameters for appraisers and most are covered in the Uniform Standards of Professional Appraisal Practice (USPAP). Others are universal to all professions in the civilized world or are simply common sense. A few of the more obvious ones are listed below:

1. Appraisers cannot charge a fee based on a percentage of the valuation conclusion for appraisals rendered.

2. Appraisers may act on behalf of a client in a different capacity, i.e. broker. In this capacity the appraiser is in fact a consultant and broker, not an appraiser, and his/her fees can be based on a percentage of the selling price. In this scenario, a percentage-based fee is in the best interest of both parties and acts as an incentive to achieve the best return for the client. Customarily, the buyer or vendor (auction house) of the personal property also pays the broker a small commission which acts as an incentive to encourage the broker to steer more items to the vender in the future. Often it behooves the property owner to seek the assistance of a knowledgeable consultant in order to achieve a better return.

3. Appraisers acting on behalf of a client in another capacity, i.e. consultant, agent, etc., should be entirely transparent in their actions to prevent misunderstandings from occurring. Written agreements and/or third party (the client's attorney or CPA) involvement serve to make apparent the proposed actions of the consultant on behalf of their client.

4. Appraisers cannot make valuations based on the client's wishes, needs, or commands. All value opinions must be based on market comparables. 

5. Appraisers cannot buy any object that he/she has ever appraised and said objects cannot be bought in his or her interest (exception: when the object is offered for sale at a public auction).

6. Appraisers cannot accept personal property items in trade or as a gift from a client for services rendered to the client.

7. Appraisers are not expected by the Court to authenticate personal property items. The official function of the appraiser is to identify objects (describe) and to witness the existence of properties as an impartial third party on behalf of the client and the second party (i.e. insurance company). By definition, the only person that can authenticate any object is the maker of the object, however there are specialized experts that can authenticate to the satisfaction of a Court. Museum curators, specialized scholars, advanced collectors, and sometimes very experienced appraisers can fulfill this role for specific personal property categories.

8. Appraisers are not advocates for their clients; attorneys are their advocates. Appraisers advocate only for their own opinions.

GLOSSARY

Apposite Value: The value that is pertinent and fully relevant to the appraisal assignment.  

Appraiser:  A professional identifier and witness, not an advocate.  

Absorption Rate: The number of properties that can be sold in a given amount of time without depressing the value of all similar properties. 

Blockage: A form of depreciation resulting from a number of similar properties being offered that is too large for the normal market to absorb as of a specific date. 

Comparable Sale: Sale of a property of the same kind as the subject property; capable of being compared with the same property. 

Comparables: An abbreviation for comparable property sales used for the purpose of comparison in the appraisal process; comparatives; also comp or comps.

Concealment: Deliberate failure to reveal material facts that would affect the validity of an appraisal valuation. Grounds for refusing an assignment or immediately ending an assignment.

Connoisseur: A discerning judge of the best in any field. One who is especially competent to pass critical judgments in matters of taste. 

Constant Dollar: Used to measure value after adjustment of change in the value of money due to the passage of time. 

Cost Approach: Is research and analysis of the cost of a substitute property with equivalent function and desirability. 

Current Dollar: Is the adjusted value of money at any point in time, the current value of money (i.e., the value of money today). 

Depreciation: The lessening of value through age, deterioration, obsolescence or blockage. 

Due Diligence: The responsible observation of the accepted standards of a profession. 

Economic Obsolescence: Loss of value due to influences external to the property, such as supply and demand in the regulatory and legislative environment. 

Elements of Quality: The elements of a property significant to a connoisseur. 

Expert Pool: A group of people particularly knowledgeable about a type of property or market.

Expert Witness: Is a person who is by reason of education or special training and experience possesses specialized knowledge in a particular subject area. 

Fair Market Value: Sec. 1.170(c) Income Tax Regulation, Rev. Proc. 66-49: “The fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts.” 

Functional Depreciation: Obsolescence. 

Highest and Best Use: Is the reasonable, probable, feasible, and legal use of a property, which results in its highest value. 

Historical Cost: Is the actual, first cost of a property at the time it was first placed into service. 

Income Approach: Is research and analysis of the present worth of anticipated income. 

Interpretive Description: A complete description including value analysis and professional jargon that a connoisseur would understand. 

Literal Description: A description any reasonable mind would understand. It is free of value analysis and professional jargon. 

Market Comparison Approach: Is research and analysis in order to determine a value indication of a property using one or more methods of comparison of similar properties that have sold in the relevant market. Adjustments are made for all differences that affect value, such as differences in characteristics of value, in market level, and in time. 

Market Level: Is the specific geographic location at which trade occurs to which one can assign an opinion of economic status. For example, Sotheby’s is at the top and a yard sale would be at the bottom. It always affects valuations. 

Market Value: Same as Fair Market Value except that the provision for lack of compulsion to buy or sell is removed and the assumption of a sale within a specified time frame is added. 

Original Cost: The actual cost to the current owner. 

Picker: One who makes a living or a hobby of supplying an antiques dealer or art dealer with merchandise.  

Placed: Where a property was manufactured as indicated by an identifying feature or writing found on the object (e.g., “The maker signed, dated, and placed the quilt.”). 

Provenance: The origin and history of ownership or the source of an object back to the place of origin. 

Purpose of the Appraisal: The purpose of the appraisal is the type of value required (i.e., replacement value, fair market value, market value, etc.).  

Replacement Value – Comparable: The price required to replace a property with a comparable property to satisfy the description or use of the property to be replaced. Extraneous characteristics (similar age, origin, appearance, provenance, & condition, etc.) and anticipated costs are taken into consideration. 

Replacement Value – Cost New: The price required to replace a property with a new property to satisfy the description or use of the property to be replaced. 

Replacement Value – Reproduction Cost: The price required to replicate a property at current costs, using similar materials and the same level of craftsmanship, in order to satisfy the description or use of the property to be replaced. 

Substantial Evidence: Such evidence as a reasonable mind might accept as adequate to support a conclusion, where there is no bias, relationship, emotional involvement, or pecuniary interest.