Do you have any idea what your personal property is worth? That is all the cool stuff INSIDE your home or office. Is the obscure painting that hung for years in grandfather’s dining room worth a small fortune? Is that old porcelain centerpiece with winged cherubs actually a piece of pricey Sevres Porcelain from 18th century France? Could the carpet bought at an estate sale for fifty bucks be a semi-antique pre-1950s Persian rug? Could the American Indian basket Aunt Mabel bought at a charity shop be a museum-quality piece from New Mexico?
We’ve all read the sensational stories about finding priceless treasures at garage sales and Goodwill. We have all heard yarns that just after someone gives something away it sells for hundreds of thousands at auction and makes banner headlines in USA Today.
A few years ago I wrote about an old painting that hung over a fireplace in a Dublin rectory and when centuries of grimy soot was removed the priceless Caravaggio masterpiece came to light. And then in New England a garage sale regular bought an old frame for $4; and when he took it apart he found one of only 200 known originals of the Declaration of Independence behind the stained floral print. It sold at auction for $2.4 million.
Some of these unrecognized treasures could be languishing in local attics or garages—one never knows how a hunt goes. Evelyn, who took my class, “How to Shop Antiques Like a Pro,” paid five dollars at an estate sale for “a blackened coffee set; tray, coffee pot, tea pot, sugar and creamer,” in a dirty box in the corner. She polished the pieces, checked the back-stamp with a magnifier and discovered the great find. She sold the early 20th century Georg Jensen sterling silver Coffee-Tea Service for $6,000.00.
Another surprise came when an East Coast eagle-eyed appraiser spied a white bowl on a mantel. “Oh! That old bowl, my mother paid $3 at a tag sale…” The five-inch bowl was from the Song Dynasty; it sold for $2 million at auction.
Many people do not have a definitive dollar amount of the total contents of their home. I see heartaches. I hear stories about great losses through fire, natural hazards or theft. The total replacement cost of what we own is far beyond what we may expect it to be.
How do we remedy this dilemma? Make a list with the approximate purchase price, date of acquisition and where the object was bought. Next, call your insurance agent and find out what is covered and what is not.
WHAT IS AN APPRAISAL?
An appraisal is a formal document report. It is not a guess; it is not a verbal approximation of value. An appraisal is prepared accordingly with stringent guidelines by a professionally-trained expert who researches the values in the marketplace with methodology formulae.
When clients call me in to appraise their belongings; antiques, art, furniture, books, kitchenalia, ornaments, electronics, collections, clothing and jewelry and the other accumulated artifacts—they are astounded at the values of what they own—their possessions, their Stuff with a capital “S”.
So what is one to do? Make a list, that’s what. Start with one room. I usually identify the room as living room, dining room, bedroom #1, 2, 3 etc. I start at the left and go clockwise around the room taking photographs, and identifying each article with a number. It’s not as hard as one may think when the object is numbered, described and valued. When the first room is done, move to the next and the next, as time permits. There is no timeline, just start. Once you have a list, describe the pieces to the best of your ability. Object type; wood, metal, glass, fabric, Plexiglas, approximate size, shape, condition, where and when bought, and the approximate price. At this point I suggest adding any family legend; history, provenance and previous owners, like grandfathers, grandmothers, relatives or famous people and such.
In most cases, an insurance company will not accept an unqualified appraisal done by the owner, however, it is a good way to start before you decide if you need a professional to come in and complete the job. If insurance claims are to be made on expensive items, there must proof of ownership and proof of value by a neutral party. The more documentation, bills of sale, receipts and information provided to the appraiser, the easier it is to complete the job.
Remember that objects of great value will need an insurance floater for extra protection from loss, theft, fire or vandalism. I suggest you call your insurance agent to find out what is actually covered under your existing policy. Objects that may require extra floaters on the homeowner’s policy include antiques, jewelry, fine art, silverware, furs, Oriental carpets and rugs, musical instruments, guns and electronics.
When the list is made of each room, type the document, add up the total and—voila! You’ll be surprised. If you cannot arrive at an educated guess or close value for your own satisfaction, complete the chore, or if you need further help, call me. I have been a professional appraiser for over twenty six years. Value conclusions are based on prescribed methods of valuation and research, and the document is written in an opinion report.
Professional Appraisers are trained to do the best job for their clients, and they must adhere to the standards of ethics set forth by Uniform Standards of Professional Appraisal Practice, USPAP. Professional appraisers usually charge by the hour. Training to be the very best takes years of study supported by hands-on experience. Personal Property Appraisers must study Appraisal Ethics, Report Writing Standards and should be familiar with Market and Value Research and Analysis, and Legal Issues. Professional appraisers are not licensed; however, their professional profile resumes state their education, qualifications, and certain areas of expertise.
There are many reasons for qualified appraisals by a professional; to insure in case of loss with adequate coverage, to make a donation documented for the IRS, to pass on to loved ones, property division for divorce, equitable distribution, inheritance, or to liquidate—to sell in the secondary market or at auction. It is important to know the value whether it is retail replacement value for insurance purposes, or fair market value for IRS donation of $5,000 or more, property division, equitable distribution or liquidation. They are different appraisal values.
NET WORTH
What do you think of when you hear the word ‘millionaire’? It’s not only luxury cars, high-end diamonds and Picassos—it’s the everyday stuff that adds up fast—the things we have accumulated over a lifetime. The total amount of one’s net worth can come as a surprise—a very big surprise. Take your assets, subtract your liabilities, and that, my friend, is your net worth.
So many people do not know their actual net worth, or at least they do not include their personal property assets in the equation. You need a compass to guide you when you are building a business, buying a home or need to provide your net worth for a bank loan. It is the wise man/woman who calculates their net worth annually, it is wise to make it all happen as soon as possible.
After you have stated your savings, cash, investments, IRAs, Retirement Accounts, Stocks and Bonds, Life Insurance Cash Value, Real Estate, Automobiles, other assets and personal property; and have deducted what you owe on mortgages, bank loans, credit cards, property tax and other taxes due—you will have an idea of your net worth. At this point you can decide to save more and spend less.
A word to the wise; many families own things that may have greater value than perceived. Art purchased 20 or 30 or more years ago could have tripled and quadrupled in value. Antiques too have enjoyed an increase in value, and we know what happened to the silver and gold markets. There are many surprises on the horizon and when objects are valued greater than expected, they take on an extra mantle of appreciation.
Why does art increase in value? After artists die, their paintings or other artworks become rarer and may increase in value because the demand exceeds the supply. So that obscure artwork that has hung on the living room wall for years should be looked at by one who knows the market. Not all objects appreciate in value—some fall out of favor and cannot be sold at any price. Collectible plates, collectible knick-knacks and shelf objects made specifically for that market do not hold their value. Collectibles are a flash in the pan—once the craze evaporates, prices bottom out.
Rare objects, in good condition should be looked at as values vary from time to time and region to region. Markets range from being very soft to being robust by what’s happening in the economy. The good stuff and one-of-a kind-pieces always hold value.
If you become overwhelmed by ‘appraising’ your own personal property, call in an expert. I have done over a thousand appraisals and have valued tens of thousands of objects over twenty six years. I have owned several antiques stores, exhibited in high-end antiques shows, have chaired many antiques roadshow type events, have written columns on antiques for newspapers and magazines, have access to colleagues for consultation, realized auction results, a library of books and I know how to value personal property, antiques and art for insurance, IRS donation, liquidation, equitable distribution or property division. Up your assets, call an appraiser.
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