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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.
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