This article was published in the December 1998 issue of AntiquePrime Magazine & Journal.
For What It’s Worth …
Q. A few years ago I had my Victorian dresser appraised, thinking that I might sell it. Shortly afterwards, I saw one very similar to mine at an antique shop, with a much higher price on it. Was the appraiser wrong?
A. Your question raises two important concepts in the appraising profession. Let me first explain what an appraisal is and then I’ll tackle the valuation issue.
An appraisal is a researched, written report that the appraiser should be willing to defend in a court of law, if necessary. Only accept an appraisal if it is not hand written, if it contains a description of the items appraised, and if the appraiser signs it. If your appraiser did not write and sign a report for you, you received a consultation or “verbal approximation of value”, the appraiser’s best guess as to the value of your dresser.
Since you told the appraiser that you were considering selling the dresser, the appraiser gave you “market value.” The same item has many values, and the knowledgeable appraiser will know which value to assign based on the intended use of the information.
Market Value reflects the price at which property would change hands between a willing buyer and willing seller, neither being under compulsion to buy or sell, and both having reasonable knowledge of relevant facts. Market value is appropriate in appraisals for client resale.
Replacement Cost, primarily used for insurance coverage and claims, is the cost to replace an item with another having similar qualities within a reasonable amount of time in the relevant marketplace.
The price tag that you saw on the dresser similar to yours is indicative of its replacement cost. Your appraiser gave you a value that you could expect to receive if it sold at auction, estate sale, or private sale, rather than at retail.