Appraisal Basics – Appraisal Costs
What Appraisals Cost
Confused about what appraisals cost? Well, you are not alone!
Let’s look at how appraisers typically charge for their services and why.
How Appraisers Charge – and How They Shouldn’t!
By the Hour:
Most appraisers charge for their services by the hour. This acknowledges the fact that some items take considerably longer to appraise than others. If you spend a little time on the internet researching appraisal costs, you will find that hourly rates vary widely between about $75 and $500. Typically, generalist appraisers charge between $100 and $250 per hour. Their rates depend on their level of expertise, the type of appraisal, the complexity and size of the appraisal project, and where the appraisal occurs. Nationally recognized appraisers with significant, highly specialized appraisal experience charge on the higher end of that scale.
By the Piece:
Alternatively, some appraisers charge by the piece. This may be appropriate where there are a number of fairly similar items that would all take a similar amount of time to appraise. Typically, formal appraisals for a single item start at about $250 to $350. Additional items will typically add incremental costs of between $25 and $100 per item. The exact amount depends on their rarity, uniqueness, and the ability to find appropriate comparable properties to appraise them.
By the Project:
Clients often want assurances up front about the cost of their appraisal project. This is understandable from a budgeting standpoint. However, there are typically too many variables for an appraiser to accurately quote a price for an entire project. Clients almost invariably add items to be appraised during onsite inspections that weren’t part of the original project quote. Some items to be appraised may take extra time to identify or date before the valuation can take place. Comparable properties may be harder to find than expected for some items. And some clients like to have more involvement or have more questions about the appraisal project than others. All these contribute to increased unpaid project costs. For this reason, appraisers may provide a range of anticipated project costs rather than quoting a set project price.
By Appraised Value:
Under no circumstances should an appraiser charge a client based on the appraised value of their items. Why? Because this builds an inherent bias into the appraisal process. An appraiser may intentionally or accidentally inflate appraised values to justify charging a higher amount for appraising them. For this reason, this method for charging for appraisal services is expressly forbidden under USPAP (Uniform Standards of Professional Appraisal Practice) and under the code of ethics of the International Society of Appraisers (ISA).
What Goes into an Appraiser’s Rate of Pay?
Those of us who are truly dedicated to being highly qualified certified personal property appraisers take our expertise and credentials very seriously. And our fees reflect it.
Appraising is a complex field requiring rigorous training, years of experience, and compliance with ever-changing legal requirements. To even become entry-level appraisers, we must complete extensive coursework, submit projects for review and pass rigorous exams. If we wish to become certified, we must complete additional specialized courses plus log a certain number of billable hours each year. We must then maintain our certification with required update courses, continuing educational units (CEUs), peer reviews, and more exams. Many of us also have undergraduate or advanced degrees and years of experience in related fields. And if we are truly advocates in our profession, we will additionally participate in professional personal property appraisal associations.
In addition to investing in ourselves, we must invest in the tools of our trade and in our professional relationships. There are membership fees to professional associations and business groups. Then we subscribe to multiple industry reports, auction house records, and sales databases. As our careers grow, we accumulate personal libraries with books dedicated to deepening our knowledge in our areas of expertise. We visit museums, attend auctions, participate in conferences, peruse galleries, and wander antique shops. And, of course, we network with fellow appraisers and other professionals in our field such as authenticators, specialists, restorers, insurers, auction houses, and estate sales companies. These business costs typically add up to thousands of dollars each year.
The bottom line is that what appraisals cost is closely aligned with what our commitment is to lifelong learning, our level of expertise, and our costs of doing business.
How a Professional Appraisal Report Impacts the Cost of an Appraisal
Writing professional personal property appraisal reports is a large aspect of the cost of appraisals. These reports must meet the requirements of USPAP as well as the report writing standards dictated by professional appraiser associations. Typically, this means that a report must address between 45 and 60 aspects of the appraisal process to be considered in compliance. Some of these aspects include:
- The objective and intended use of the appraisal.
- The definition of value and valuation methodologies used for the appraisal assignment.
- The scope of work conducted for the appraisal assignment.
- An identification and analysis of the health of market in which the appraised items are bought and sold.
- Any limiting conditions encountered and their impact.
- Full descriptions of the items appraised in the report based on physical, onsite examinations including their artists or makers, mediums, sizes, origins, subject matters, condition issues, and ownership histories.
- Thorough photographs of the items and their value characteristics.
- An explanation of the value conclusion – sometimes including a detailed comparison of the comparable properties utilized in arriving at those conclusions.
- An up-to-date curriculum vita of the appraiser’s professional qualifications and credentialing.
- Definitions of key terms used in the appraisal report.
- Identification of sources used in the preparation of the appraisal report.
Even appraisal reports written for relatively low value items must address all these requirements. Those including items of greater value or rarity usually require more research, in-depth analyses, and justifications to support their appraised values.
Can you begin to see why professional appraisal reports, even for a single item, can be over 20 pages long and significantly impact the cost of appraisals?
Beware the “Free” Appraisal!
You may run across websites, galleries, dealers, etc. who offer free or very low-cost appraisals. They may be convenient and affordable, but they have significant problems and limitations. First of all, they are probably not in compliance with USPAP requirements. Secondly, they are typically not provided by certified appraisers actively working in the field. Thirdly, they are often under researched, overly generalized, grossly inaccurate, and biased. They will also not meet IRS requirements for estate tax, gift tax, probate, and non-cash donations.
So, what are they good for?
Quick valuations like these may be good if you are just trying to find out what something might sell for. They can help you to decide if something needs to be sold separately from an estate sale or if restoration on a damaged item will be worth the cost.
But caution is still strongly advised!
Why? Because whether intentionally or inadvertently, free “appraisals” are almost always biased. Antique dealers may want to purchase your collection at a considerable discount and may quote a low “appraised” value to justify their low offer. Galleries, conversely, may value a work by an artist they represent on the higher end to keep the value of their own inventory high and to make buyers feel good about their purchases. An auction house may want to include your item in their auction and may give you an overly optimistic auction estimate to consign with them. And some websites offering free appraisals may simply be trying to boost their search engine optimization (SEO) ratings or drive traffic to other sites with more expensive services. Just be conscious when you get a no or low-cost “appraisal” like this of who is providing it and what their motivations might be.
What Does a WorthWise Appraisal Cost?
The answer is, of course, it depends!
WorthWise Art and Antiques Appraisers maintains hourly rates that are very competitive within our region of operation. Our single item appraisal reports begin at $300 and go up from there depending on the type and number of items to be appraised. Sometimes a few items can be valued in a single hour. Other times, an item might take two or more hours to value. When several items of a similar nature are being valued, they can often be done more quickly than the same number of vastly different items. All hours spent conducting onsite inspections, researching markets, analyzing comparable items, consulting with other experts, valuing items, and writing up results in our USPAP compliant appraisal reports are charged to the client. Out-of-pocket costs incurred during the appraisal assignment such as travel expenses, printing, consulting fees, etc. are also charged to the client.
We often also require retainers on larger projects or payments for onsite work before leaving the site. In all cases, we require full payment for our appraisal services before releasing our appraisal reports.
Are Your Items Worth the Cost of Appraisals?
We ask our clients to carefully consider the cost of appraisals before making a decision to contact us with appraisal requests. This is particularly true when items are purchased for low prices at estate or liquidation sales, inherited from a relative as part of a typical small estate, or found in a purchased storage unit. Such items may include used or vintage furniture with typical signs of wear, china sets, tableware, collectible figurines, toys, record albums, books, miscellaneous coins or stamps, clothing, linens, printed reproductions of art or posters, office equipment, old cameras, tools, etc. And while there are exceptions to every rule, these types of items are often not worth the cost of being appraised.
When in doubt, though, complete our form on the Contact page and include some sample photos of your items. We’ll be able to advise you once we have a better idea of what you have to be appraised and why.
While the cost of appraisals varies significantly, it is important to note that WorthWise never performs free appraisals. We can often provide some lower cost alternatives, but we charge for our business services just like all other business professionals do.
Sometimes, you can get an idea of what less expensive items are worth by looking them up yourself on eBay’s sold listings. This is particularly true when you know your item’s maker and perhaps even have a model name or number. Click on the small “advanced” link to the right of the big search box on eBay’s home page, then type in your item and check the box that says “sold listings” before clicking on the search button. The resulting list of sold items with their actual sold prices are a much better predictor of the value of your item then asking prices will be on current eBay auctions.