Image Credit: Terill Welch
When working with an appraiser, 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 has been suggested, an appraisal value is made with the assumption that the piece is real. Unique to each situation, there are four different types of appraisal values.
Depending on what you plan on using the value for, insurance versus selling for example, you need a different valuation.
Here are the four main types of appraisals:
Fair Market Value
Fair market value is the price that the piece would sell for 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
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
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
Liquidation value is the value of the piece if forced to sell in limited conditions and possibly time constraints.
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 make sure all of their appraisal documents are stored in the Pieces Page. That way they’ll be ready the moment you need them, saving you 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.
