By Roberta M. Kramer

Evaluating an Appraiser

Careful Selection is Crucial to Safeguarding Art and Precious Objects

When was the last time you had an appraisal done for your art and antiques? Many collectors and homeowners have spent a great deal of time and money to acquire beautiful works of art and antique objects and furniture, but how often do we think about the more mundane aspects of ownership? Along with the need to care for and conserve these items for posterity comes the need to properly insure them against a variety of peril including theft and fire.

Are you considering making a gift of fine art or antiques (or other non cash tangible personal property) to a museum or other institution? If the gift is more than $5,000 in value you will need a good, qualified appraiser to appraise the item(s) and to sign a form IRS 8283 for inclusion with your Federal Tax return.

Have you experienced a loss of personal property due to a covered peril on your insurance policy? If so, you may need an appraiser to help you sort through the replacement value of your losses and assist in the claims process with your underwriter and adjuster.

Have you made provisions for your fine arts and antiques in your estate plans? Does your company own a collection that has not been recently evaluated as an asset? You may well need an appraiser to assist you in any of these circumstances. If you are the executor of the estate of a friend or relative and the estate contains fine quality tangible personal property, you will need an appraiser to conduct a Federal Estate Tax Appraisal for the estate tax return.

As should be apparent from the above scenarios, it is always a good idea to find an appraiser that you are comfortable with and develop a relationship so that your appraiser may assist you in a variety of ways now and in the future.

For the purpose of your insurance needs, if it has been more than five years since your last appraisal, it’s time to do it again.

So how does one choose a qualified appraiser to write a current report for your insurance carrier? There are several good sources for referral including your conservation company, Sotheby’s and Christie’s, your attorney or banker and through the three main organizations of appraisers in the United States, the International Society of Appraisers (ISA), the American Society of Appraisers (ASA) and the American Association of Appraisers (AAA). All three have web sites and will be happy to give you a list of qualified appraisers.

But how to choose? When shopping for an appraiser, do your homework and ask questions, including requesting a copy of the appraisers curriculum vitae (CV) listing their past experiences and clients. Feel free to contact clients that the appraiser has worked for in the past to determine if this is the right person for you. Don’t forget to ask how the appraiser bills for his or her services. Never hire an appraiser who charges by the item or who charges a percentage of the value of the property appraised. A good appraiser charges for service by the hour. Expect to pay between $125 and $275 per hour for a well-qualified appraiser. Resist temptation to hire a less expensive and less experienced appraiser, it may take them many more hours to finish your job and end up costing more in the long run.

If you have a collection of one type of art or antiques—for example American Impressionist painting—make sure to determine if this appraiser has experience with this type of property. The more the appraiser is familiar with your area of collecting, the better the document will be.

Once you have selected an appraiser, before you make an appointment to have them come and view your property, contact your insurance agent or company and get a list or guideline as to the specific dollar amount an item of fine art or antique should be worth before they require an appraisal. This dollar amount will vary widely depending on your underwriter; so don’t waste time and money on items that are covered under your general contents coverage. Be very clear with your appraiser as to the nature and purpose of your assignment— remember you are the client and as such, you run the show.

After you have completed the appraisal process it should be a smooth flow to maintain it at current replacement value. If you acquire new items, make sure to add them onto your policy and then you can have your appraiser update your document every few years without having to start all over again from scratch. 

If you collect fine art or other items that are in an unstable market, rapidly appreciating or widely fluctuating, make sure you repeat the update process more frequently. Examples of these markets include American Impressionist painting, especially the second and third tier painters whose work is rising very rapidly.

In the case of a loss, your insurance company must approve the appraiser you choose. When items are totally destroyed, for example after a fire, the appraiser will work with you and do a “forensic” appraisal to determine what your item(s) will cost to replace. Several members of CDI are currently involved in a large fire-loss claim and are working together with the insurance carrier to make our client whole.

Finally, having a good relationship with your appraiser may be of great help for needs other than your insurance requirements. Appraisers familiar with your things may be able to assist your legal professionals in estate planning and will be needed if you plan to make any charitable gifts of personal property to appraise for your income tax deduction.

Your appraiser may also be a great resource for you if you are interested in selling any items, or may be employed to assist you in making decisions about acquisition of new items. Take the time to find the right appraiser for you, in the end it will save you time and give you peace of mind knowing your property is well documented and protected. 

Roberta M. Kramer, ISA is principal of Roberta Kramer & Associates, Inc. in Chicago, Illinois.