About Appraisals

We are constantly contacted about fine art appraisals. As we have stated before, your best source for art appraisals is an certified appraiser, not a gallery. (Some galleries will take exception to this -- but remember, galleries are in business to buy low and sell high therefore creating a conflict of interests when it comes to appraisals.)

According to Maureen File of File's Appraisals there are 3 types of appraisals:

• "Replacement (often Retail) Value: The price in terms of cash or other terms that would be required to replace a property with another of similar age, origin, appearance, provenance and condition, within a reasonable length of time, in an appropriate and relevant market where the owner would be most likely to seek out a replacement item. This type of value is usually utilized for insurance purposes and most often reflects retail and gallery venue prices.
• Fair Market Value: This is the price at which the property would most commonly change hands between a willing buyer and a willing seller, neither being under compulsion to buy or sell, and both having reasonable knowledge of relevant facts. This type of value is often used for Estate, Divorce, Donation and tax purposes and often reflects "estate" or "tag" sale, public auction, or relevant consignment shop venue sales where ample and adequate promotion, and customer attendance and traffic occurs. These prices are usually not adequate for insurance replacement purposes." (Editor's note: this is where Sotheby's, Christies, and most auction house prices would be. Our auction pricing falls between this and the next type of auction.)
• "Liquidation Value: The most probable price in terms of cash or other revealed terms, for which a property would change hands if sold immediately or at a quickly advertised and conducted "yard" sale or liquidation auction or private sale. These prices reflect the lowest valuations and are substantially lower than replacement as well as fair market values."

It is interesting to note that many appraisers are not only using published auction prices from various auction houses, but also prices of like items that have sold through Ebay and Ebay Live Auctions to determine a more comprehensive Fair Market Value.

Fifteen years ago and earlier the exclusivity of auction houses like Christies, Sotheby's, and Butterfields & Butterfields somewhat established higher market values and left the general public in an inflated pricing structure. The more accessable web is creating a more democratic pricing model.