The Art of Appraising Art: Answers to the most wanted FAQ

14 Nov 2017

If you are a collector and you’re browsing Lot-Art to find your favorite artworks, it is very likely that you came across the term “appraisal". Knowing the ins and outs of this complex matter is important for both aspiring and experienced collectors alike. That’s why we compiled a quick (and simple!) guide to art appraisals and the most important things to know about it.

What is an art appraisal?

Art appraisal is the process of evaluating the value of an artwork.

Why would I need an art appraisal?

Appraisals are needed when you sell or buy valuable artifacts or simply like to estimate the total value of your collection. Some Countries, like the USA, offer tax incentives for collectors, and certified appraisals are required to calculate tax benefits.

Whocarries out appraisals?

Appraisals require a lot of experience on both the art market and art history. Certified specialists at auction houses and art galleries typically do the job.

What influences the evaluation?

Factors that influence the value of an art piece are both endogenous and exogenous. To evaluate the intrinsic characteristics of an object the main features to be taken into account are:

  • the author (artist, maker or brand),
  • the historical period of production,
  • size,
  • technique,
  • state of conservation,
  • scarcity,
  • certificate of authenticity,
  • documented provenance.

Secondly, many other external factors have their say on the final appraisal:

  • market data and specialist knowledge,
  • art fair references, exhibition catalog entries,
  • auction results and public sales,
  • current market trends,
  • the artist’s standing, to name a few.

Curiously enough, the subject depicted in the work (especially in case of paintings, sculptures and engravings) which tends to fall in and out of fashion, also influences the evaluation. Another important question is how the piece compares to other works of the same artist: is it the chef d'oeuvre, the example of a relevant period or subject for the artist or only a minor example of its work?

                     

 Exhibition Venus meets Venus at the Galleria Sabauda, Turin, 2016. Courtesy of ansa.it

How does the appraisal of a piece relate to its price?

The appraisal is supposed to reflect the fair market value (FMV) of the piece, in other words, the most reasonable price to pay for it. That’s why for items sold on the secondary market the appraisal is largely influenced by recent hammer prices, which are accepted as the closest to the fair market value.

Be careful not to confuse them with gallery sales results: galleries control the price single-handedly (and actually operate on the basis of their markup), therefore it has nothing to do with FMV. This is why before buying a valuable piece off private hands it is advisable to have a look at its appraisal first: the price which a piece was bought for originally does not necessarily reflect its fair market value. 

However, if you are appraising the piece for insurance purposes, its evaluation might result higher than the FMV. Since the insurance replacement value (IRV) is the amount of money that the insurance company has to pay in case of a loss event, IRV includes additional expenses that may be incurred in order to replace it. Be careful of this distinction especially when you’re considering buying something: the appraisal of reference should be FMV- and not IRV-based.

                         The auction room at Christie’s, via Christie’s

Is it necessary for the appraisers to see the piece?

Looking live at the work is important for the specialists because of the multiple factors that influence the outcome of the appraisal. You can get an online appraisal too, but if the photos do not render some important characteristic you risk ending up with a lower evaluation. Inspecting the back side of two-dimensional works is as important as inspecting the front since they often carry identifying marks like gallery stickers or exhibition labels which can be a source of valuable information.

How long is the appraisal valid?

The value of an artwork is volatile and keeps changing, so do not consider its appraisal an all-time constant: it can skyrocket or plunge in a matter of years. It responds to such subjective influences as opinions of critics and academics, exhibitions put on by museums or purchases made by celebrities, as well as long-term economic trends that are not so easy to capture (like the value of Chinese art that has benefitted from the increased wealth of the Chinese collectors and increased demand). Hopefully, it happens to the pieces in your collection too, but do not take it for granted that a piece will be appraised at a figure equal or higher than its purchase price, if you have bought jewellery or modern art at a gallery you have to discount the seller's markup which can easily be 100% of the auction price. 

How do I attest the quality of the appraisal?

It may sound somewhat simple, but make sure that the prospective appraiser indeed has relevant experience and is qualified to appraise art. Another matter to watch out for is the potential conflict of interest - the appraiser should not in any way be involved with any party or have a potential benefit from the results of the evaluation. If possible, opt for a third-party specialist and always demand a conflict of interest disclaimer in the papers.

Can I appraise my art myself?

Without profound knowledge about the dynamics of the art market and its price mechanisms putting a tag on your collection is a risky move and may cost you more money than the appraisal expenses. Furthermore, valuable objects typically carry high symbolic value, and if a piece is of a particular significance to you (for example, it’s been in your family for 100 years) your evaluation is likely to be inaccurate.

How much does it cost?

The appraisers’ work is typically charged hourly with an average rate of 150-200 USD per hour but also depends on the complexity of the work (for example, the need to conduct provenance research) and the estimated value of the item (especially for jewellery). You can also try to strike an agreement per object or per complete report, but never consider offers based on a percentage of the appraised value, which is the most straightforward example of the conflict of interest.

Free Appraisal by Auction Houses 

The best source of free appraisals are auction houses. As their main business is to sell your items at the best price, they will be pleased to provide you with an indication of estimate without cost or commitment of sale. Most auction houses operate appraisals directly at their offices and during scheduled tours to the main cities where they operate. With the development of online auctioning, some Houses allow their consigners to implement appraisals online through their website.
For example, Catawiki has a team of around 180 in-houseexperts, all specialists in their various fields. Here the review process is done entirely online. You will be asked to provide a description of your item, some specifics such as technique, period and signature, and of course you will be asked to provide photos. The experts will read your description and examine your photographs, reviewing your lot for quality and authenticity.  Once he has provided you with a free appraisal, it will be your choice to either put the artwork for sale for the pleasure of your wallet or keep it at home for the plesaure of your eyes.

This article was brought you by the art blogger Irina Popova in collaboration with Lot-Art.com the platform for searching auction’s lots worldwide from a single place.

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