What do you need an appraisal for?
The main reasons for personal property appraisals are:
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. Pre-move Appraisals
E. 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 market places.
How do appraisers charge for their work? Do they give estimates?
Appraisers charge by the hour or by the item. Estimates are just that. We can not estimate the exact charge for an appraisal although we may be able to give you a ball park 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.
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! )
Due to the change in market values over the past several years, most insurance companies suggest your antiques, art work, 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 2019
**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 and 5 years.
Quotes for appraisals will be given at the time of inspection and are based on an hourly rate, the amount of time involved in the inspection, research, authentication, and inventory. This is an estimated charge. Our prices for appraisals are well below the national average:
Written appraisals - used by the IRS, insurance companies, and attorneys estimated by hour. (Considerations given when doing whole households)
Verbal estimates of Value – there is no charge for "verbal estimates of market value" for items sold through LEGACY Appraisals & Estate Sales. This is a service offered to our customers. It is NOT an appraisal.
For items not sold through LEGACY, there will be a hourly fee. - This is an appraisal.
The consultation service offered includes verbal opinions of value. It is not an appraisal. This service is meant to provide information to the client in making a decision as to proceeding with options such as resale on the secondary market or obtaining a formal written appraisal for insurance or other purposes.
Additional research, court testimony, or travel will result in additional fees.
Inventory services with or without values, are also available at an hourly fee.
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 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 was a mutually agreeable transaction. This is Fair Market Value.
Let’s talk about other things that are NOT Fair Market Value:
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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LEGACY Appraisals & Estate Sales, LLC of Amarillo is proud to announce our association with Process Art House and it's owner, Jacob Breeden, artist and art expert. We are both here to provide art appraisals with the upmost professionalism. Teaming together gives you assurance that both the appraiser and the art expert are here to give you qualified and defendable appraisals that are written to the current USPAP standards.
Jacob Breeden Office: (806) 731-1481
Fine Art Consultant