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Aug 9, 2016

The Art of the Appraisal

By Samantha Lilley

Fine art and other luxury assets can be an additional source of capital if you are looking to grow a collection, make a business investment or handle other life events. Whether you are planning to sell or borrow against fine art and luxury assets, the first step is securing an appraisal of the item.

Most lenders provide valuations on the basis of ‘Current Open Market’. This is the achievable value when offered for sale i.e., (by public auction), taking into account the condition and age.

The valuation naturally begins with a physical appraisal of the asset by a qualified appraiser. Sometimes it may be necessary to consult specialists to get a range of opinions, especially if the asset class is particularly unusual. The way each asset category is appraised is very different using different sets of criteria.

Fine Art

The art market spans a vast period, from Roman and Greek, through the Renaissance up until the present day, with everything in between. For this reason, it is often necessary to consult an expert who specializes in the particular period or artist. The huge prices paid for modern and contemporary art means there are a huge amount of fakes in the market place and often specialist are best placed to spot them.


When seeking to confirm the authenticity of a watch, it is often important to examine the certification/paperwork provided by the manufacturer and make sure that the serial number on the watch and paperwork tally. Watches purchased on the primary market, are often registered to the buyer, though if they are not; this does not mean there is anything wrong. The increasingly sophisticated level of fakes being produced also means appraisers must examine the movement as well as the case, in order to confirm authenticity. They then will look to comparable examples sold at auction, taking into account the condition and age of the watch before arriving at the final valuation.


Loose diamonds and diamond set jewelry are assessed using the ‘4 C’S’: Cut, Clarity, Color and Carat weight. The cut of a diamond will determine brilliance and fire of a diamond and clarity relates to how many inclusion are in a stone. Color usually ranges from D to M in a colorless stone and carat weight is measured because the bigger diamond the higher the value will be. Appraisers will also consider fluorescence which is the diamond's tendency to emit a soft colored glow when subjected to ultraviolet light which is seen negatively by the trade.


The desirability of gems is often measured on cut, color saturation and the inclusions present. The more desirable the stone the higher the market demand and un-treated gems usually command higher prices on the open market. Appraisers will also look for treatments, some treatments can be detected when using the appraiser’s loupe others may have to be tested by laboratories, who will provide industry recognized certification. Gem-set jewelry also set precious metals, will often bear international convention marks or hallmarks indicating the type of metal.


For wine to retain its value it needs to be stored continuously in climate controlled conditions from the time it is bottled up until the point when it is sold. This significantly reduces the chance of the wine going off as even the most sought after wine is worthless if it is corked. For this reason the provenance of wine is as key as its vintage and brand. Like artwork and watches, forgers are also faking wine, by changing the labels on the bottles to better brands and vintages. Often the only way to properly evaluate wine, is by tasting it. Naturally the only people able to spot the nuances that separate a good wine from a fine wine are sommeliers and wine experts.


Gold is one of the areas that has grown most significantly in the past decade. Often the value of jewelry and gold watches is determined by how much gold can be extracted by smelting. The way gold is valued is by weight. Chemicals can be used to check the quality of the gold, but it is sometimes necessary when valuing ingots or Indian jewelry (which is made from particularly high grade gold) to send the jewelry to an external laboratory to have it X-rayed to check the item is made from solid gold.

About the Author

Samantha Lilley MRICS, FGA, DGA

Director of Valuations, Borro

Samantha heads the UK valuation team for Borro, an online platform for secured loans, responsible for regulating all valuations. She is a Member of Royal Institute of Chartered Surveyors, serving on the Arts and Antiques Faculty Board from 2003 until 2011 and has over twenty years of auction house experience in the valuation of fine art, antiques and jewelry.

She is also a Fellow of the Gemological Association of Great Britain and has completed the Diamond Grading Diploma.

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