Beware of Free Art Appraisals and Appraisers
Q: I never pay for an art appraisal. When I find an interesting piece of art and need an appraisal, I usually take it to a local auction house and have their appraiser tell me what they think they can sell it for. I hardly ever sell through them though. I either keep the art for myself or sell it to collectors on my own. I get the best of all worlds by saving on appraisal fees, auction house commissions. Is this a good idea? And what about those appraisers or dealers on the internet or in the phone book who advertise free appraisals? I'm thinking about starting to use them too.
A: A "free appraisal" is never free, they're bad ideas for several reasons and art worst, they can end up costing you far more than a paid appraisal. The obvious problem in your case here is that you're repeatedly using the same people for free advice at the auction house. The auction house offers free appraisals to attract merchandise to their sales; they're not a public service or a price research service for your personal dealing and collecting needs. They very likely know you're taking advantage of them and that nothing will come of the time they spend with you, so as a result, they move you in and out as quickly as possible with minimal efforts on their part. They won't bother performing in-depth research or fine tuning the accuracy of their initial figures unless you consign the art. Why waste time with you when there's nothing in it for them?
The less obvious problem with so-called free appraisals from auction houses is that they're not really appraisals at all. They're only quick approximations of what auction houses think your art will sell for at their sales. The estimates do not necessarily reflect how the art might sell at someone else's auction or what it's fair market value might be. What one auction house can sell an item for might be completely different from what the next one can sell it for. Hammer prices at any particular auction house more accurately reflect the client base of that auction house than it does the market in general or the fair market values of the art that they sell.
But wait; there's more. Another problem with free appraisals is that, except in the case of the world's major auction houses, the staff people who conduct them tend to be younger, less experienced, and not necessarily able to accurately assess dollar values. Actual auction results may differ drastically from what you are told. Even the major auction houses can be way off in their estimates with art selling for either far greater dollar amounts than their estimates or failing to sell at all. Also keep in mind that auction houses try to keep estimates on the low side because that means they stand a better chance of selling the art.
And yes, sadly there's still more... and this is the part you really better pay attention to. Be aware that art and antiques dealers and "appraisers" who offer so-called free pricing or appraisal services may really looking to buy items they "appraise" on the cheap-- an obvious conflict of interest. In situations like this, when people bring them art or antiques they want, there's an genuine temptation to "appraise" artificially low, and then offer to buy at or below those values (or make referrals to dealers who'll buy at those prices, with the "appraisers" often getting finder's fees, or more accurately, kickbacks, when dealers buy).
I include the following disclaimer in every single appraisal I perform: "I certify that neither my selection to make this appraisal nor my compensation for making it are contingent upon the amount of the valuation reported, that I have no present or prospective interest in the property that is the subject of this report, and that I have neither bias nor agenda with respect to developing or reporting results." In other words, I state up front that I have absolutely no conflict of interest in determining values, and that my sole duty is to provide the individual requesting the appraisal with the most accurate price information I am capable of providing. If your "free appraiser" isn't willing to sign off on a statement like that, then you've got a problem.
The moral of the story? Be extremely careful in any circumstance where you think you're getting accurate price information at no cost. And don't think you know enough to protect yourself if you lack the knowledge and experience to do so; buying, selling, appraising and dealing are highly specialized professions, and plenty of art and antiques that look like they have little or no value are actually worth plenty. So free appraisals can cost you far more than you think you're saving.
When you try to get something for nothing, that's pretty much what you end up getting-- nothing. Either learn how to price art on your own by establishing working relationships with experienced dealers who will teach you, or hire an appraiser to show you how it's done. If you'd rather stick with your auction house plan of action, make sure you pay for their services by regularly consigning to them. That way, they'll spend more time evaluating whatever you bring them. And forget about using dealers or appraisers who tell you they'll do it for free-- you may well end up regretting that. As things stand now, the time and money you think you're saving may well be nothing compared to what you're losing in potential profits from relying on fast free price estimates.
More about art appraisals from Alan Bamberger:
The upshot? If $$$ are involved, get an educated non-conflicted professional opinion first. Paying a little up front can save you WAY MORE later. Believe it. Email me -- Alan Bamberger-- or call 415.931.7875. Now for the freebies...
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