Debra Rhodes Smith


Member, Appraisers Association of America,

USPAP compliant

Appraisals are more than valuations...

They are professionally executed documents pertaining to the purpose for the appraisal. Whether this be for insurance, equitable distribution, charitable donation, asset reassessment, estate planning or bankruptcy, you can have confidence that your appraisal will be performed with the highest ethical standards and confidentiality.

What is something worth to you? What does value mean to you? Your loved ones, your children, parents and pets are all priceless. There is no amount of money that would replace them. Although they are irreplaceable, there are other things we hold dear in our life; the contents of our home that we fell in love with, acquired or gifted that define us in terms of our whims and fancies, acquired with thought and care. But what if some disaster like the ones that befell Oklahoma or Super Storm Sandy happened to your home? The reality is that everything you own has multiple values.

The first value discussed is Retail Replacement Value. This is strictly associated with homeowners or renters' insurance.  Retail Replacement Value is the highest retail value in the current market to replace an item.  For your jewelry, collectibles, artwork and antiques, most homeowner polices do not include these items for replacement value unless you have a rider and they are scheduled. In order to insure these, most insurance policies require an appraisal.

The second value discussed is Fair Market Value (FMV), This is designated to most other reasons for an appraisal to determine a value.  This value is to be used to determine: resale potential, charitable donations and IRS deductions, equitable distribution associated with dividing an estate or as a result of a separation or divorce. Depending on the purpose, some Market Values include costs such as shipping, crating, insurance to liquidate, others are only the value plus auction premiums. FMV is what a willing buyer and a willing seller agree to, not under duress, at arms length with all known facts available to both parties.  It is critical to work with a compliant tested and verified appraiser to insure the correct value is being used for the purpose.  A word to the wise, anyone can ask anything on eBay but that doesn't mean that is what it sold for. What it sold for, not the asking price, is the market value. That said, just because one Andy Warhol painting sold for earth shattering dollars, doesn't mean that all Andy Warhol paintings are worth that amount.

When in the course of appraising an item, after determining the purpose of the appraisal, the second most important step is to establish a good comparable. Sometimes it is a duplicate of a manufactured item; many times because of supply and demand or one of a kind pieces, determining what is comparable, produced in the same period by the same producer or one with comparable achievements and in the same condition, the same size as the one in question. The comparable needs to be reviewed for its value. The problem to solve is finding the accurate comparable in a current (no less than five years) open market place.

One of the reasons for many past financial debacles was bad appraisals. Collectibles of all types, including real estate were used for collateral to secure loans. Worth was inflated because the incorrect comparable or the wrong value for purpose used and the comparable was not transparent. When a default occurred, the collateral did not have the FMV for asset liquidity. Our economy came down like a house of cards. To insure higher standards, Congress promulgated through the Appraisal Foundation, very high standards required for a proper appraisal. This is known as the Uniformed Standards of Professional Appraisal Practice (USPAP). The methodology and reporting requirements are retested every two years to insure the appraiser is up to current knowledge. Proper appraisals are not a line item number and certainly not from the top of the head. There are many people out there offering value opinions only when working with a USPAP compliant appraiser can you have confidence the opinion you are seeking meets the highest professional standards.

Did you know that when donating an item to a charity, the charity has the option to sell your donation for its operating fund? This can be sold in an auction event or in the market place. If sold within two years of your donation, what the item sold for by the charity not what you originally wrote off your taxes when you donated the item, is the true FMV.  You will be notified and an adjustment will be required to your taxes for that year. It could be higher or lower. The IRS requires a specific type of appraisal attached to your filing when taking a deduction over a $5,000.00. Not all appraisers are qualified to produce IRS acceptable appraisals. If not properly executed, they will reject your deduction. Check with your accountant as it relates to you.

So, you thought you could amass a collection and just enjoy it. You need to go the extra step and be a responsible owner, consider what the effect would be if you suffered its loss or be sure when you are selling it you are receiving the best price you can. Let's say you are not fond of something that you felt so dear about before and want to divest yourself of that item. The market is extremely volatile.  What was in vogue 10 years ago may not be the same today. On the other hand, items in your collection may have greatly increased in value. So the correct balance is called for here. Not to pay for more insurance than you need and to be sure you are not under insured. Therefore it is important to update values every five years. Are you setting out to invest in a particular item? An appraiser can determine the FMV so you do not over pay and get caught up in the updraft of making the deal. Note that this appraiser does not charge by value of the item, only by time of the appraisal process. Nor is there any past or future interest in the item(s). It is unethical for an appraiser to offer to buy the item from you. That is a conflict of interest. Hire a proficient appraiser and your investments will be certain to provide more than visual enjoyment.

Please utilize the contact page for additional information relative to your appraisal requirements, fee schedule and scope of work required.