By Chris Coleman
On June 15, a Wall Street Journal article titled, "Online
Appraisals Overvalued?" reported that Eppraisals.com has closed.
This online appraisal company frequently charged clients $25 to
$40 per item and paid the appraiser $10 to $15. How much time is
a professional appraiser going to spend for that return?
Every collector knows that condition is paramount in evaluating
items. Originality is critical, the human race has been
reproducing things for centuries. The enormity of the
reproduction industry - from glass, ceramics and furniture to
ivory and iron - makes identifying a reproduction from a photo a
tremendous challenge.
There is the story of Queen Anne bonnet top secretary that a
major auction gallery had identified from a photo as a period
piece. Of course their letter included all the standard
disclaimers, but the owner believed he had an extremely valuable
piece. Years later, when he was thinking of selling it, he
contacted a qualified professional appraiser, who had the sad
task of informing the collector that his precious secretary was a
Twentieth Century factory made piece with a plywood back that had
been in a fire.
There is an old saying, "you get what you pay for." If you pay
$25 for an appraisal you can expect a $25 appraisal or, in the
case of an electronic appraisal, maybe a $10 or $15 appraisal.
Appraisers are, for the most part, independent business persons.
When seeking an appraiser, a serious collector will generally use
due diligence in screening candidates. All appraisers do not have
similar qualifications.
Neither state nor federal governments regulate personal property
appraisers, unlike real property appraisers who are required to
have specific training and state licenses. Your neighbor who has
been frequenting flea markets could, legally, decide that
appraising would be a great part-time job and set up an appraisal
business.
A professional appraiser will have a combination of formal
training in appraisal theory, principles, and methodology, plus
training and experience in the specialty field in which s/he is
practicing. Appraisal associations like the International Society
of Appraisers, the Appraisers Association of America, and the
American Society of Appraisers provide formal training,
established appraisal standards, and a code of ethics. Most
appraisal associations require their members to requalify
periodically.
The same items might have many different appraised values
depending on how you intend to use the appraisal. For instance, a
value for insurance may be very different than a value for estate
tax, consumer resale, or charitable contribution. Other assigned
uses include investment, liquidation, price confirmation,
equitable distribution, loan collateral, and casualty loss.
Appraisers are entrepreneurs and establish their own fee
structure, normally based on their knowledge, level of training,
specialty expertise, and the market in which they practice. Rates
in a large metropolitan area may be higher. The fee of a trained
professional appraiser will normally fall in the range of $75 to
$150 per hour for examination, research and report preparation.
Hourly rates or bid prices are ethical fee structures, but you
should never pay a percentage of value.
Do not have someone who is interested in buying the piece
appraise an items. A professional will tell you up front if items
are not of sufficient value to warrant the cost of a formal
appraisal. For such items you may only need a verbal
approximation of value, which is not based on research and
commands a lower fee.
There are seven questions you may consider asking when hiring an
appraiser: What qualifies you to appraise my property? Do all
appraisers have similar qualifications? Do you belong to an
appraisal society that tests its members? Have you been tested?
Do you take continuing education classes? How will you handle
items that may be outside your specialty area? What is your fee
and on what basis do you charge? What will the report be like?
The author, a retired professional appraiser, is currently the
Executive Director of the International Society of Appraisers.
Call 888-472-4732 for a free copy of "Be Certain of Its
Value."
