Appraisals

What do you need an appraisal for?
 

The main reasons for personal property appraisals are: 

• obtain insurance coverage for your treasured items
• equitable distribution due to death or divorce
• estate taxes
• art donations over $1,000 (required if over $5,000) (Legacy will fill out all required IRS tax forms)
• loss of value (moving damages) value at the time of loss (fire/theft)
• items you wish to sell

Do you need a value for insurance replacement values (new or used condition?) 

It is a very good idea to check their insurance policies and make sure you are covered. Also, video and photograph your household from various angles and keep copies in a secure place off site.
 

What types of appraisals should be considered?  
     A.  Insurance Appraisals - the current replacement value of your items
     B.  Estate Appraisals - required for a taxable estate (all items appraised)
     C.  Donation Appraisals - for donated items over $1,000 & required for items over $5,000

      D.  Divorce 

      E.  Pre-move Appraisals 

      F.  Market Values if you wish to sell an item
 

What should be expected from an appraisal service?
Efficient and ethical service.  Appraisers should write their appraisals and keep them in the strictest of confidence.  All appraisals should be written by a qualified appraiser and the reports should be Uniform Standards of Professional Appraisal Practice (USPAP) compliant and completely legal as per IRS standards.  

How is an appraisal performed?
The appraiser comes to the location where the item is located and examines the property to be appraised.  This includes note taking on the size, condition, composition and desirability of each object to be appraised. Next, the appraiser photographs the items in order to document not only the conditions of the item but it's existence.  Values are researched using comparable sales for similar items in the most common marketplaces.

What Can I expect from the appraisal process?

• On-Site Inspection
• Measurements and photographs of your Art, antiques or insurable items
• Photographs of the item
• Detailed description of each item
• Analysis of Market Data and Current value of each item
• Comprehensive Written Appraisal Report that will be accepted by attorneys, banks & all courts of law.
   

How do appraisers charge for their work?  Do they give estimates?
Appraisers charge by the hour, by the item or by the job.  Estimates are just that.  We cannot estimate the exact charge for an appraisal although we may be able to give you a ballpark figure for a report from past experiences.   The amount of time it takes for inspection, research, and report writing time is what determines your fee.  Travel expenses are charged for jobs located 15 miles or more from Amarillo.
Appraisers never should use a percentage based fee.  This is highly unethical if not illegal.
 

What can I do to help this process along?
Gather any previous appraisals, receipts, older photographs of the items, or any documentation that will help establish where and when the item was acquired or it's past life. An inventory is helpful but will have to be verified by the appraiser.

What appraisals are not.

*The appraisal report should not be considered as an authenticity report.

*Appraisals are not inventory reports.  Legacy can perform inventory reports should you need this service.
 

As an accredited member of the International Society of Personal Property Appraisers, (ISA)  www.isa-appraisers.org  I must strictly adhere to the current ISA code of ethics and the Uniform Standards of Professional Appraisal Practice (USPAP) which is authorized by Congress as the Source of Appraisal Standards and Appraiser Qualifications. ww.appraisalfoundation.org  (for credentialing requirements)  
 

An accredited appraiser is expected to perform valuation services competently and in a manner that is independent, impartial, and objective.  
 

( Beware of appraisers who offer to buy what they appraise! )
 

COVID-19 was declared a pandemic on March 11, 2020 by the World Health Organization. The financial markets have sustained substantial turmoil, and due to the developing situation, it is not possible at this time to quantify its long-term or short-term effects on the marketplace overall. The value opinions contained in the appraisal reports are based on findings of an analysis of market data available to the appraiser at the time of the assignments. 

Insurance companies suggest your antiques, artwork, collectibles, sterling, & fine jewelry be appraised every two to three years.  

Update appraisals are not very costly and also provide a proof of ownership in case of a loss.
 

*Some of these standards have changed for 2023-24

www.isa-appraisers.org
 

**This is not a sign up, pay your dues organization - but one you must meet certain minimum yearly educational requirements in order to qualify to be a member.  You are required to requalify every 2 years for USPAP and every 5 years for ISA..      

Written appraisals - used by the IRS, insurance companies, and attorneys estimated by hour. (Considerations given when doing whole households)

Online Appraisals - These single item, desk top reports are available now. These are for market value information but can be used for insurance as well. 

https://legacyappraisals.onlineappraisalsnow.com/

Additional research, court testimony, or travel will result in additional fees.   

Inventory services with or without values, are also available at an hourly fee.
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As an appraiser, I have to understand the definition of Fair Market Value (FMV). As confusing as FMV can sometimes be for the professional, imagine how convoluted it must be for the lay person?
 

Under the United States Treasury regulation 1.170-1(c), Fair Market Value is defined as:
 

The price at which the property would change hands between a willing buyer and a willing seller, neither being under the compulsion to buy or compulsion to sell and both having reasonable knowledge of relevant facts.
 

That definition simplified everything, didn’t it? I think not.
 

For someone who does not understand that definition and all that it implies, it can be left up to their own imaginations to fill in the blanks, which can be a very bad thing. The person who does not understand will conjure up crazy, inflated “values” that are not values at all; they are merely asking prices they found online.
 

This is NOT Fair Market Value or even Market Value!
If you are at an estate sale and you and the seller exchange $20 for an item, and neither of you are being forced into this exchange, that $20 is the FMV for that location,day and moment. If both you and the seller have all the basic facts, the item being a flat screen TV that works, and you agree on a price, and you are not being forced to buy or sell, it a mutually agreeable transaction.  This is Fair Market Value - in the secondary marketplace.
 

Let’s talk about other things that are NOT Fair Market Value:

• It is not what you paid for an item (most people pay high retail and not FMV).
• It is not wishful thinking. True values are arrived at with careful research and methodology.
• It is not family lore. We know the stories of how “valuable” mom always said an item was, but that is not fair market value.  Many of our older relatives may not understand how very different things are today, or why their children have little interest in their prized possessions.
• It is not outdated appraisal values that were probably written for insurance purposes or in a much healthier market.
• It is not what you think it should be, nor the amount of money needed to pay bills.
• It is not the asking (or even the SOLD price you see on a similar item on the internet or Ebay.)  Asking prices are just asking prices.  We’re interested in what it actually SOLD FOR - when and where it sold & how long it was on the market.
• It is not based on sentimentality (how much you, or a loved one, cherished it).
• It is not about how old it is or how long you’ve had it. “Old” doesn’t necessarily mean it has value.
• Condition, condition, condition!

Everybody seems to have their own idea of fair market value, but very few I hear about are actually “fair.”  At the end of the day, the market is what it is.  All we can do is our very best to educate our clients, even if they don’t want to hear what we have to say.
 

Bottom line: An item is worth what someone will give you for it. Always enlist the help of a professional to guide you through, when you don’t have the answers.
 

©2016 The American Society of Estate Liquidators®
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