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Everything You Wanted to Know About Appraisals, But Were Afraid to Ask

October 18, 2023

Reading time: 12 minutes

In honor of National Estate Planning Week, we thought we’d take a deep dive into the world of appraisals with an Ask Me Anything with our dear friend, colleague, and Ally of Stuff, Sarah Reeder, Founder of Artifactual History Appraisal.

In addition to being an expert on ‘stuff,’ and specifically the value of ‘stuff,’ Sarah is also author of the book Ray Eames in 1930s New York, co-editor of Worthwhile Magazine™ and co-creator of The Art Elevator Collector’s Club. Read on to learn more about what she does as an appraiser, when to contact an appraiser, and even those questions we all want to ask (but may be afraid to!) such as what the difference between an appraisal and a valuation is.

For our members who are new to the appraisal process, how would you sum up what you do?

Reeder: I like to think of what I do as being part lawyer, part accountant, and sometimes even part therapist! It might surprise some people, but appraisals are nothing like what you see on TV. My work entails numerous hours of research, the preparation of legal documents, and meeting meticulous professional requirements for appraising items to establish a value in a specific level of the market on a specific day (called the effective date) for a specific intended use. (We’ll come back to that later!)

Appraisals are nothing like what you see on TV...

The work appraisers do is a very specialized type of professional service akin to an attorney or an accountant that requires a lot of time and focused research, so the very quick and informal “off-the-cuff” depictions of appraising we all see on television have edited out the lengthy preparation (because it would be pretty boring to watch!) that goes into those short segments we see. But I wish it was more widely known that there is so much more work that goes into appraising than the 2-minute clips we see onscreen.

The therapist part sometimes comes into play because as you know so well here at Artifcts, objects can hold powerful memories and inspire strong emotions, totally independent from what their monetary value might be. Sometimes it’s a delicate conversation when the “heart value” and financial value are not aligned, and that is where I rely on market data and research to help individuals understand the current market conditions and corresponding value of the item. I always emphasize that market conditions should not diminish the positive sentimental associations they have with an item—they just happen to be the lens that appraisers must use in our professional work.

So, getting down to the nitty gritty, can you walk us through a typical day?

Reeder: There is no one typical day. That is one of the many things I love about being an appraiser, you never know what you’ll be working on next! There are two types of appraisals I spend most of my time on insurance appraisals and estate appraisals. And yes, they are different!

When I am working on an insurance appraisal, I am creating a legal document that will protect you and your items in the event of damage or loss. These appraisals are for the retail replacement value of the object and in doing so, pins that object and that value in time. That specific moment in time is called the effective date of the appraisal, and all appraisals have effective dates.

The effective date of appraisal is so important in all appraisal report intended uses, because it provides critical context for the numerical appraised value. The markets for art and antiques are always changing, much like the stock market we are more commonly familiar with, so the appraised values need to be contextualized to a specific day, because on the day before or the day after market conditions may have been different. For insurance appraisal reports, the effective date is typically the day I inspect the items in person as it establishes the condition I witnessed on that day.

The markets for art and antiques are always changing, much like the stock market...

When working on these types of appraisals, I spend a lot of time researching the object, documenting it with photos and a detailed description, cataloging it with a standardized format that will allow future users of the appraisal report to know the characteristics of the appraised item, researching the specific level of the market for similar items for the appraisal report’s intended use, and then developing an appraised value based on all the above.

In the case of insurance appraisals, the appraised value is generally the replacement value of the object (i.e. what would it cost to acquire the same exact or very similar object in a short period of time from a retail dealer). For example, if I am appraising a painting by a particular artist for insurance purposes, I’m going to identify which galleries represent that artist or sell paintings by that artist, and then compare their available inventory and pricing (which often is not publicly available and requires outreach to the galleries) to the appraised painting in terms of subject, size, condition, era of the artist’s career, and other factors.

Based on the current retail data I can obtain, I then make adjustments up or down if needed relative to the appraised painting, and document all relevant research for my appraisal client workfile, which I am legally required to keep for a minimum of 5 years. The final number after the specific adjustments from the comparable records accounting for differences from the appraised item is the appraised retail replacement value. So it’s all a lot more complicated and research-intensive than what the public typically sees in popular depictions of appraisers on television.

Insurance appraisals are very different from estate appraisals. Estate appraisals are not used for insurance coverage.  Estate appraisals are prepared at fair market value and are required in some situations to be filed with the federal government or relevant state and local governments for estate tax filing. The legal professional handling an estate is the one who determines whether this is required in specific estate situations.

While insurance appraisals are typically prepared at retail replacement value, estate appraisals are prepared at fair market value, which is often quite a bit lower. The United States government defines fair market value as

"The price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts." According to Technical Advisory Memorandum 9235005 [May 27, 1992], fair market value should include the buyer's premium. [Source: Treasury Regulations Section 20.2031-1 (b).]

For estate appraisal reports, the effective date is typically at the time of the death of the deceased. This is very different than with insurance appraisals as it could take an executor months and months to close out an estate and yet the value is still pegged to the date of death. There is something called the “alternate effective date” which is 6 months after the date of death, which the estate can elect to use if the market has changed significantly in that time period. I always like to confirm which effective date the estate is using as this is a critical factor in guiding my valuation research.

Can you tell us a bit about the tools of your trade? What do you take with you when you visit someone’s home to start an appraisal?

Reeder: I always like to take a good camera with me for capturing documentary photos, a tape measure so I can obtain the dimensions of artworks and the other items I am appraising, a clipboard and paper so I can take notes on-site that will later be expanded with research back in my office, a blacklight for examining artwork for inpainting and other restorations, a jeweler’s loupe for studying silver marks and other small details, and a flashlight for studying artist signatures and providing additional ambient lighting for my photographs in dark locations. I carry multiple flashlights and measuring tapes with me so if one breaks while I am on-site, I have a backup available to be able to continue working.

I have to make sure I capture all the precise details that make your object unique. If it is artwork, is there an artist signature? Any blemishes or marks? Water or sun damage? All of these things are important to ascertain the value of an object, and I need to be able to document them while onsite.

 

Worn leather bag used for appraisalsSarah's trusty go-everywhere appraisal bag full of her tools of the trade. 

Some people, and I admit, I was one of them at the beginning, may not know the difference between valuation services and an appraisal. Could you help explain what makes the two different?

Reeder: Sure! The Uniform Standards of Professional Appraisal Practice (USPAP) define valuation services as:

“A service pertaining to an aspect of property value, regardless of the type of service and whether it is performed by appraisers or by others.”

An appraisal is defined by USPAP as:

"(noun) the act or process of developing an opinion of value; an opinion of value. 
(adjective) of or pertaining to appraising and related functions such as appraisal practice or appraisal services.
Comment: An appraisal is numerically expressed as a specific amount, as a range of numbers, or as a relationship (e.g., not more than, not less than) to a previous value opinion or numerical benchmark (e.g., assessed value, collateral value).” 

In terms of the general popular context of these two words outside of their specific USPAP definitions, a valuation is typically more closely associated with ballpark estimates and not with a legal document. Think of it as something that will get you basic guidance, such as getting an approximate sense if an inherited collection is simply sentimental and has no monetary value, or conversely, if it might have significant monetary value.

A valuation is typically more closely associated with ballpark estimates ...

Appraisals are legal documents.  A verbal ballpark numerical range cannot be used in court to settle an estate, with the IRS to document tangible assets for tax purposes, or with an insurer to document items for an insurance policy. USPAP-compliant written appraisal reports are needed for those intended uses.

Are there any red flags our members should watch out for when looking to hire an appraiser?

Reeder: One of my personal red flags is if the appraiser essentially says, “I will tell you how much it is worth and then purchase it from you.” There is a major conflict of interest there, and their interest may not be in your best interest.

Another major red flag is if an appraiser is not USPAP-compliant. USPAP is a very important professional and ethical standard regulating appraisers to help protect users of appraisal services.

It’s always best to look for an independent appraiser who is USPAP-compliant, and ideally is also a member of one of the professional associations for appraisers such as the Appraisers Association of America (AAA), the International Society of Appraisers (ISA), or the American Society of Appraisers (ASA). I am a Certified Member of the Appraisers Association of America and a Certified Member of the International Society of Appraisers.

You also want to make sure that any appraiser you hire has expertise in YOUR object(s). A jewelry appraiser may be great for your jewelry collection, but not your collection of mid-century modern furniture and vice versa. In USPAP, this is called the “Competency Rule”—basically, is this appraiser competent to appraise your items? If they aren’t, they shouldn’t do it.

You also want to make sure that any appraiser you hire has expertise in YOUR object(s)...

When should people hire an appraiser? Are there any life transitions that may necessitate an appraiser?

Reeder: Life transitions are a great time to take stock of what you have and what’s it worth. Some common life transitions where it can be useful to engage an appraiser are:

      • If you have inherited potentially valuable items such as artwork. An appraiser can provide expert guidance on their value and prepare an insurance appraisal report so they can be scheduled and protected with your insurance company.
      • If you plan on moving it can be very helpful to have valuable items appraised for insurance purposes in advance or to update an existing appraisal to make sure the insurance coverage is current.
      • For estate filing purposes when someone has passed. The estate’s attorney will direct whether an estate appraisal is needed.
      • For proactive estate planning purposes—if you have large collections, it can be helpful to get a sense of their value and how they might be structured in your estate plan for maximum tax efficiency for your heirs (again, your attorney will be a very helpful resource in this process).
      • Sometimes divorces are another life transition that may require an appraiser for the equitable distribution process. 

And finally, you’ve experienced firsthand the joy (and usefulness!) of Artifcting. Any advice for our members or thoughts on how Artifcting can aid the appraisal process?

Reeder: Yes! Artifct your ‘stuff.’ Don’t wait! The details, photos, even video can help an appraiser get to work immediately determining an appraisal scope of work and sometimes even using the Artifcts as a resource to appraise items that may now be damaged or lost. It can save a lot of time and back and forth emails if you Artifct and share your Artifcts with your appraiser. Artifcts really is perfect for an appraiser’s workflow!

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Sarah Reeder is a Certified Member of the Appraisers Association of America, a Certified Member of the International Society of Appraisers with the Private Client Services designation, and a graduate of New York University's Program in Appraisal Studies in Fine & Decorative Arts.

© 2023 Artifcts, Inc. All Rights Reserved.

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Collection Management Made Easy and Meaningful  

Artifcts thanks Sarah Reeder, Artifactual History Appraisal, for her contributions to the following article.

Reading time: 4 minutes

You may have one or many collections, intentional collections and accidental collections. Part of the fun of collecting is keeping track of it: Knowing what you have and what you’re still hunting for, what is sentimental vs. valuable, and what is okay to sell some day versus you’d prefer to pass down to someone special.

Short checklist about collections

 
 
We know a thing or to about accidental collections. Try out our free checklist available here.

If you were a professional archivist, librarian, or appraiser, you’d have a ready tool in your pocket to help manage your collections. It’s called a finding aid. But guess what? As you Artifct your collections, you are implicitly leveraging the best of finding aids, but in a friendly form that all can enjoy and benefit from. 

Here’s your peek inside the world of archivists where we show you how finding aids and collection management are made easy and meaningful with Artifcts!

What Is a Finding Aid, and Why Should You Care?

Unless you are a collections professional (archivist, librarian, appraiser…), the concept of a finding aid is likely foreign to you. For the longest time at Artifcts we even mistakenly referred to them as finding keys. Oops!

A finding aid is exactly what it sounds like: A tool that helps you locate items within a large collection in a fast and efficient way. A finding aid is a guide that describes the contents of an archival collection. A well-designed finding aid makes quick work of determining the topical relevance of any collection. After all, what good is a collection if discoverability hinders locating and using elements within the collection in the future.

Many of us have experienced the feelings of dread and being overwhelmed upon contemplating many boxes of inherited items that probably have something important contained in them but what and where? Imagine if you had a finding aid that told you exactly what was important and where you could locate it!

This is the magic of what finding aids do.

To a large degree, information within a finding aid is standardized per guidelines from the Society of American Archivists, “Describing Archives: A Content Standard,” better known simply as DACS. Standardization means a professional could work with or for any gallery, library, archive, or museum (aka GLAM) and their collections without much difficulty. They might simply display the information differently than one’s accustomed to.

A finding aid would have information such as: reference code, title, date, extent, name of creator, description, dates, and location. Does that list look familiar? If you Artifct, it should… 

For those of us who didn’t go to Library Science school, in our daily lives we probably do not want to think about taxonomies, metadata, bytes of storage, or even finding aids. We want to enjoy and share the meaning behind the items we’ve collected and ensure the stories and value behind them live on!

Enter Artifcts: Solving Age Old Problems of Finding Aids for Every-Day Collectors 

What we created at Artifcts is the solution to several age-old problems of finding aids in an individual and family-friendly fashion. And this means great things for you all!  While finding aids are brilliant tools for professionals, they are disconnected from how most of us describe and catalog the ‘why’ of our collections. We need more multitasking support in our lives.

Here’s how you can use Artifcts to preserve the history and the value of your collections beyond the constraints of traditional finding aids.

Use those QR codes.

If you were to work with a professional appraiser, archivist, or collections manager of any type, they will likely offer as part of their services a description of the collection and list organizing the inventory within your collection, a finding aid of some sort. But how do you link that list to your physical collection? At Artifcts, you can print a QR code or use Artifcts QR code stickers to link the physical and the digital.

music box with Artifcts QR code on the bottom of the base

 
 
An Artifcts QR code unlocks the story and value!

Record your stories.

Move beyond “scope notes” and “meta data” inherent to the archivist’s expertise – “This is a 19th-century {name of item}” – and breathe life, context, and personal meaning into the objects in your collection, e.g. “This is what Great Great Grandma brought from France when she moved to New York. And I’m giving it to you now.”  

Artifcts offers the options to share your story, indicate what you want to do with items in the future, and supply critical other information like where on earth you’ve stored the item in your home or elsewhere and the supporting documents (receipts, appraisals, and more). 

Connect the dots.

We typically describe each Artifct you create as connecting the dots, because only you know how photos of those specific items relate to shape a story or history. But we help you go a step further, too. You can use our @ feature to cross reference one Artifct with another, tying together pieces of a collection and pieces of a story that others may not otherwise realize relate.  

Description field on Artifcts with menu open showing options for linking with @

 
 
Simply type @ as you add the story or description to your Artifct to link to other Artifcts.

Leverage your community.

Let’s not forget the value in sharing and collaboration to learn more about items in your collections. Through Artifcts Circles and the option to give ‘Edit’ permission to other paid Artifcts members, you can crowdsource information from your loved ones and experts alike to capture important details about your collections that may add historical and family history information as well as increase the value, too. 

Preserve what is.

Add the photos, videos, and original documents you have to your Artifcts. There’s a spot dedicated to securely preserve each as is. No compression. No conversion. What you upload is what you can always download again, too.

 
 
 
 
In our spring 2024 series finale of Evenings with Artifcts, our expert guests shed light on the 'why' and 'what' of collections.

Ensure that if you work with an appraiser or other collections manager in the future, they provide documentary support through Artifcts, so that you can protect and share the value of your collections with friends and family as well as knock off those “to dos” with your insurance company, financial planner, and estate attorney. 

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You may also be interested in these ARTIcles by Artifcts:

What to Consider When You Plan to Donate Art and Other Collectibles

From Rare Art to Family Heirlooms: Tips From a Master as You Consider Selling Your 'Stuff'

Everything You Wanted to Know About Appraisals but Were Afraid to Ask

How to Artifct that Collection

© 2024 Artifcts, Inc. All Rights Reserved.

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Artifcts® Platform Now Supports Publishing to Custom-Designed Books with Partner Akin

Whether you think about photo books as unique and personalized gifts or dream of publishing a life memoir, we love our books! Today Artifcts announced a new partnership with Akin (https://akin.house/artifcts-books/) to offer simple, custom designed books to Arti Community members who wish to publish their Artifcts to books. 

You need only look at the explosive growth of photo book companies to support everything from build-your-own to instant print from Instagram or your phone to know how much we love to have and to hold books. 

Together, Artifcts and Akin have made it simple and affordable to publish a custom-designed, premium quality, personalized book of your Artifcts.  

“Not everyone enjoys spending hours combing through photos, uploading them into software, stressing over layouts, colors, and font choices,” commented Artifcts Co-founder Ellen Goodwin. “Our partnership with Akin means you can simply choose the Artifcts you want to publish, share them privately with Akin, and they’ll lay out the book in the template of your choice and ship it off to you! The whole process for our members takes minutes!” 

Artifcts excels in innovation that places the needs of its Arti Community members first. People expect to share their stories with meaningful context that includes photos, audio, and video. Artifcts has ensured this promise translates to printed books, too. Unlike a standard photo book, for every Artifct you publish, you can include a QR code that allows the viewer to scan and access additional photos and video tied to the story. Your book can come alive. 

“We don’t want our members to worry about the book creation process. We want people to enjoy spending time reliving their stories, and recording what they value most,” said Artifcts Co-founder Heather Nickerson. 

For more information, visit Concierge & Other Professional Services or review the FAQs available at Artifcts.com/FAQs. 

###

© 2024 Artifcts, Inc. All Rights Reserved. 

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Not Sure What to Write? Tips from Author Jeff Greenwald

He's authored 1000s of articles, several books, and what's maybe the first known travel blog. And during the Fall 2022 series of Evenings with Artifcts Jeff Greenwald shared with us simple but powerful tips, and a healthy dose of perspective, to help us craft our own stories behind the objects of our lives.  

Watch the full Evenings with Artifcts event here.

  • It is hard to write about an object with no personal meaning but even harder when it has tremendous personal meaning. Bear that in mind and go easy on yourself. 

  • Start with something true. This is the trick to writing anything nonfiction. For example, start with a little line about where you got the object: “I bought this in a street market in Istanbul.” And from there go on to describe the scene a little bit and what happened there that connects you with the object.  

Start with something true.

  • Other starters for your Artifcts:  

        • Where were you when you acquired the object? 
        • Was it a gift? Who gave it to you? Tell a bit about them. What was your relationship with them that they felt they should give you a gift like that? “The moon Rocket was a gift for my friend Dave Mccutcheon, and he and I have been friends for many years and share a love of robots and spaceships and dinosaurs... all those things we loved when we were kids.” 
        • Why is it important to you?
        • What feelings does it evoke in you?
  • If a story comes to mind, you can just start jotting it down anywhere. Let your thoughts go where they will. It can be a collection of random thoughts that you can look at later and put together into some sort of a story structure. 

  • We all have stories. Writers block comes from our internal critic. It challenges you with, “Why would anybody want to read it? What could you have to say? What makes you think you're so great that anyone should listen to anything you're telling them?” You have to tell yourself, “I have a right to do this because I’m a human being with a story, and the story deserves to be told whether or not you, my internal critic, thinks that it does.” Push the internal critic aside. 
I’m a human being with a story, and the story deserves to be told.
  • If you value the stories and need motivation to begin capturing and preserving those stories with Artifcts, make a deal with yourself like Jeff did. Jeff made a pact to give away the objects once their stories were told. Maybe you’ll choose to Artifct twice per week. Or perhaps you’ll start with those items that are most meaningful to you.  

  • A bit of advice Jeff shared from esteemed author Kurt Vonnegut: Write your stories as though you are writing them for one person, as if you are telling this person each of the stories. It gives all the stories a similar tone, a singular voice. 

  • Always include when and where the object was acquired. These are important details.

  • Struggling with a title? Write out 10 of them. It will help you to start to shape your story, too.

Our stuff, the objects that we collect, that inspire us, they are really not what's important. We do not need to keep them. The only thing that is important are the stories, and the only way to keep the stories is to tell them.

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© 2024 Artifcts, Inc. All Rights Reserved.

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