Valuation & Appraisals 101

valuation

Maybe you don’t know, but we dots do more than “simply” place art on the wall. In fact, we offer a whole slew of services in our 9-step process that go beyond the traditional art consulting process (procure, present, finalize, frame, install) because art collections, like living organisms, change over time. Whether a corporate collector wants to rotate its collection, is renovating space, moving to a new location, merging with another company or even closing its doors, it’s good to know what art is worth keeping and what should be deaccessioned. That’s where valuation and appraisal comes in.

What does a valuation or appraisal do?

A valuation or appraisal establishes the value of a piece. When it comes to art, you must consider two types of value: replacement value – how much would it cost to replace this work should it be damaged or stolen – and fair market value – what would a potential buyer be willing to purchase the work for. Often the fair market value of a work will differ from the replacement value and, in some cases, be lower than the replacement value. For insurance purposes, you need to establish the replacement value of a work. Your insurance policy may require a valuation or appraisal every few years. For donations to a museum, however, the fair market value rather than the replacement value comes into play.

What’s the difference between a valuation and an appraisal?

An appraiser has worked in the field for five years, has been certified through the Uniform Standards in Professional Appraisal Practice and may be part of an organization such as the Appraisers Association of America (AAA). Members of AAA, for example, must adhere to a strict code of ethics and maintain their certification every two years. Appraisers will often specialize in a particular genre, time, period or region, such as Ann Daley, former Associate Curator for theDenver Art Museum’s Western Art Department and current curator for the Mayer Collection, who focuses her appraisals on mostly 20th (and sometimes 19th) century American art. Daley says she got into appraising because she wanted to “do something more” with her curatorial knowledge.

A valuation, on the other hand, can be done by anyone with a decent set of research skills. Yet despite the difference in certification, a valuation and an appraisal may actually lead you to the same conclusion in the end. Both examine and document the work’s condition and size and photograph the piece. Both research comparable pieces by that same artist, examine his/her auction and sales records, review his/her C.V. and determine whether or not this is an example of the artist’s best work.

What does a valuation or appraisal cost?

Generally, a valuation is less expensive. Daley advises those looking for appraisals to first do some preliminary research on their own. She says people are often fooled by reproduction prints, especially if there’s a family history involved with the piece. She tells of a family whose grandmother had studied with Thomas Hart Benton. According to the grandmother, Benton gave her a signed drawing that had been in the family for decades. Daley, called upon to appraise the piece, had to give the family the disheartening news that in actuality the work was a reproduction. Suddenly, in a situation like this, the appraisal is more costly than the work.

What doesn’t a valuation or appraisal include?

Neither valuations nor appraisals authenticate a work. Daley says she assumes the work is what the owner says it is and works accordingly unless there is an obvious sign otherwise because too many legal issues have developed over the years around authentication. Even organizations like The Andy Warhol Foundation for Visual Arts have shied away from authentication in recent years.

What can you do to ensure that your art collection maintains its value over time?

First, start by buying the best you can afford. Daley says she sees a lot of “stuff” out there – even by world-famous, museum-quality artists. She advises collectors to “stretch for the best” because the initial investment is always worth it in the end. Second, take good care of your collection. Often people don’t consider storage or proper protection. In Colorado, for example, the harsh sun and its ultraviolet rays wreak havoc on work. Be sure to invest in UV glass and store works not on display in cool, dry spaces. Third, regularly clean and maintain the art or enlist the help of a conservator to do so. Fourth, handle the work properly, whether that means wearing gloves or having a professional art handler move the work when needed.

Photo via rebloggy

Martha Weidmann

Martha Weidmann

CEO & Co-Founder