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Frequently Asked Questions
- Question: Are the services provided by an auction house the same as those provided by an independent appraiser?
- No. Auction houses often see the market through their world and will rely on prices achieved at auction as the basis for valuations. To be sure, an appraisal is supposed to contain a picture of the entire marketplace with emphasis on the relevant market. Not all properties are sold through auction and therefore reported sales may not be reliable for the property being appraised.
- Question: I am donating items of personal property. Do I need an appraisal?
- That depends. If you are donating low value properties that have a cumulative fair market value below the current threshold, the answer is maybe not. If the properties being donated have a cumulative value of $5,000.00 or more, the IRS requires the taxpayer to submit Form 8283 with their return. An appraiser will not generally be willing to sign the form and risk penalties without going through the necessary steps to complete an appraisal document.
- Question: I have receipts for everything I own. Do I need an appraisal?
- Receipts might form a basis from which you can gauge costs, but they may not be current, may be in foreign currencies, and may contain incomplete or incorrect information. It's a good idea to keep receipts stored out of your home/office, and to take photos of your property; however, the only way to know what you own as of a particular time is to have an appraisal prepared. Check with your insurance broker to find out what sort of limits there are to your homeowner's/renter's policy. Being informed is the first step to being protected.
- Question: I need to have an appraisal done because I want to possibly sell my paintings, but if not, I want to insure them. Can one appraisal meet my needs?
- No. There are different types of value and intended uses for an appraisal. If you wish to sell property perhaps the type of value is market value or marketable cash value for probable sale (as of a given time frame). If you want to insure the paintings, the type of value is replacement value comparable for the intended use of insurance coverage.
- Question: Can I ask the dealer from whom I purchased my property to write me an appraisal?
- Some insurance companies may accept dealer appraisals - check with your broker. For income tax related matters, the Internal Revenue Service disallows appraisals prepared by anyone involved with the sale of the property - the appraisal must be prepared by an independent appraiser who will provide an unbiased picture of the entire market and report value as it should be.
- Question: How often do I need to have my personal property appraised?
- This depends on the type of property you own. For fine art a review is recommended every two or three years; however, in more volatile areas of collecting, an annual review might be recommended.
- Question: What is a "certified" appraisal, and does an appraiser need to be certified?
- Any appraisal prepared in compliance with the Uniform Standards of Professional Appraisal Practice (USPAP) must include a certification signed by the appraiser. This certification is different than accreditation and qualifications the appraiser earns from an organization such as the American Society of Appraisers. Be sure that the appraiser you engage is accredited and has expertise in the properties to be included in the report.
- Question: Do I pay a fee based on the value of my property in the appraisal report? Do I wait until the outcome of a lawsuit to pay an appraisal fee?
- No. Percentage fees are unethical. Fees are based on the appraiser's fee schedule and are generally charged hourly or on a per day/partial day basis. Contingency fees are also unethical. The outcome of any litigation does not affect the fee.