Unfortunately, when it comes to antiques there isn’t a clear, algorithmic approach to figuring out exactly what an item is worth. Certain qualitative realities that come into play over time. Professional appraisers must consider and quantify the historical context, scarcity (or abundance) of a particular collection (or resource), the circumstances of its acquisition and the current condition of the asset all play an important role in its valuation.
Some antique articles are more likely than others to retain their value, while others often depreciate more quickly; this is especially true of paintings, antiques and jewelry. A perfect example of this would be the valuation of turquoise jewelry. We won’t go into that full tilt here, but if you’re interested in the valuation of turquoise you can always check out our extensive article on that here.
A professional appraiser will be able to offer a price range based on their professional experience. If you feel that a particular item is worth a lot of money, it pays to have a professional evaluation (appraisal) done.
Professional appraisals are an important strategy to determine the value of any item. This is the paid opinion of an expert based on known facts including, but not limited to personal experience gained from buying and selling similar items over the years. Some other considerations ate the latest published price guides and records from more than one sale at more than one auction. Verbal appraisals may be sufficient if you are only interested in understanding the value of an item for your own knowledge, and are not recognized by insurance companies and the courts because they are based on one person’s opinion and first hand knowledge.
Written appraisals, on the other hand are useful if you are interested in actually putting that knowledge to use. These sort of appraisals can take hours to prepare, and are comparatively expensive but they are completely necessary if you are interested in tangible proof of your collection’s worth. These appraisals fall into two categories, which are often confused but completely reliant on the purpose of your appraisal.
When understanding replacement value versus appraisal value, you can compare the variance when to what you experience when selling a car. Just as there is a difference when selling between individuals or working through a dealership, Fair Market Value and Replacement Value are quite different.
Replacement value is considered the price that the item would sell for in a retail scenario. This is basically what you would pay in a gallery, or if you were to purchase the item from a dealer or retailer. Due to typical trends in MSRP (Market Suggested Retail Price), Replacement Value tends to be calculated about 40-60% higher than the Fair Market Value.
When insuring your items, the replacement value is the figure that your insurance company will want to know. Also, understand that a verbal appraisal will always be insufficient for settling a claim so you will need to get this evaluation in writing. Whether its for a single piece of furniture or an entire collection, at the end of the day, your insurance company only wants to know how much it will cost to replace. The purpose of our assessment is to create a document that will stand up in court.
On the other hand, Fair Market Value (FMV) is assigned for estate purposes, equitable distribution, such as divorce and estate valuation matters or in cases of donation, or matters concerning the IRS. It is clearly defined as “the price that a property would change hands between a willing buyer and willing seller, neither under the compulsion to buy or sell.” The goal is to convey a realistic resale value from a willing seller to a willing buyer.
Our seasoned team can help you understand what you need for the specific purpose. Get in touch with us to get started.