Image Credit: Terill Welch
An Appraisal Assumes the Piece is Authentic
When working with an appraiser, keep in mind there is a difference between an appraisal and an authentication. When you hire an appraiser for an opinion on an authentication, you are asking the appraiser for his thoughts on who created the piece. After the creator of the piece is confirmed, an appraisal value is made with the assumption that the piece is real.
Appraisal Values Vary Based on Its Intended Use
Depending on why you need an appraisal—an insurance claim versus selling a piece, for example—you need a different valuation for each scenario.
Most people use four main types of appraisals:
Fair Market Value
Fair market value (FMV) is the price that the piece would sell between a buyer and seller on the open market. The FMV is generally what is used for charitable donation values and inheritance tax.
Replacement value is the cost it would require to replace the item with a similar work of equitable condition purchased in an appropriate market place in a limited amount of time. This value is the highest value of an artwork and is used for insurance coverage.
Market Value is what a buyer is willing to pay to a seller, with no obligation to transact, in the competitive and open market.
Liquidation value is the value of the piece if forced to sell in limited conditions and possibly time constraints.
File Appraisals With Your Documentation
When you receive an appraisal document, make sure you keep this in your records. This is the number insurance companies and estate planners will use to file a claim or set up your art estate. It can also function as a dated proof of ownership, in addition to your bill of sale.
Artwork Archive members can store their appraisal documents on the Pieces Page. The documents are always ready the moment you need them, saving stress and mitigating risk.
Work with your appraiser so you have values for every situation you may need and can reference your Artwork Archive account in any situation. Online, anytime, anywhere, you will be a savvy collector.
Learn more about archiving your collection and the details that prove your collection's worth. Download Essential Guide to Collecting Art, our free e-book that explains everything you need to keep your collection in pristine condition.