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What It’s Worth: How Art Appraisers Value Art

There are many reasons to call in a professional art appraiser to determine the value of a work of art or an entire collection. You may be dividing an inherited collection among heirs, seeking to collateralize a loan or need to raise cash quickly.

A valuation may be needed to:

- Ascertain the fair market value for an estate, donations or for the IRS

- Determine the net marketable cash value (after expenses) in the event of a divorce or lawsuit

- Obtain a retail replacement value for insurance

- Fix a salvage value (for after a catastrophe)

- Set a value for the purposes of loan collateral

- Find out the liquidation value (during a bankruptcy or to cover large expenses like tuition or a mortgage down payment)

The first question an appraiser asks is the purpose of the valuation, as the function will guide the process of creating the report.

“For a valuation, we may need to ask some personal questions, so discretion is very important. We like to make our clients feel comfortable and alleviate any apprehension they might feel. Then, we begin the visual examination and research.” Elizabeth Jacoby, President, BSJ Fine Art

It’s a Work of Art!

Putting a dollar figure on a work of art is not the same as determining the price tag on a used car or the value of stock shares. An appraiser must consider the visual impact of the painting, sculpture, drawing, etc. as well as myriad of other issues—from the reputation of the artist and the materials used to create the piece, to the availability of similar works and the condition of this individual artwork.

“The most important first step is to gauge the ‘wall power’ of a work of art. Does the work have strength and power or does is have little visual appeal? Following that, we look at condition, style, quality, brushstrokes, signature, date, size. We also examine labels on the verso, as well as obtain any provenance, literature or exhibition information from the owner.” Elizabeth von Habsburg, Managing Director, Winston Art Group

The Artist

There’s no doubt that the artist is the single most important factor in determining the value of any work of art. Artists reputations rise and fall—and often rise again with time, so an artist coveted during one period may not be perceived as desirable a few decades later. Notable artists endure for generations and works by the world’s most popular creators continue to draw visitors to museums and collectors to auction houses.

“If I had to choose just one factor, it would have to be the importance of the artist. You could have two almost identical paintings of something as simple as a still life of a bowl of fruit. But the painting done by Paul Cezanne will be worth millions, while the similar ‘reproduction’ painting will be worth only a few hundred dollars.” Sheri Mason, SLM Appraisals

The nature of a particular work of art—its size, type, the materials used, the style and the subject matter—are all considerations in the valuation. Costly materials like bronze or marble enhance the perceived value of an individual piece; oil paintings are, in general, priced higher than lithographs (and other printed works); a larger work by a prolific artist may be valued higher than similar, but smaller, works by the same artist; demand for particular subject matter (landscapes, abstracts, nudes) vary with the market context; and particular styles and periods (impressionist, cubist, abstract expressionist) carry weight in the valuation. There are markets for virtually every kind of artwork, but the prices range dramatically.

Is Love of Art ‘Conditional’?

“Each type of property whether it be fine art, furniture or collectibles has its own unique factors that make it valuable. However, the one factor that reaches across all types of media is condition; any damage a piece incurs will negatively impact its value.” Sarah McMillan, McMillan Fine Prints

Condition is often a big factor as it can detract from the value of a work—especially in contemporary works of art. There is greater tolerance for the toll time takes on art when the piece is hundreds, or thousands, of years old. So the chip in an ancient bust or a tear in the Dutch Master canvas can be forgiven.

Of course this is all contingent on the authenticity of the piece. A mislabeled work (a print confused with an original, etc.) or an outright fraud changes the entire process.

“The greatest impact on value is the condition and integrity of the piece—that it is what it is purported to be.” Helaine Fendelman, Helaine Fendelman & Associates

Provenance and Comparable Works of Art

Research is the other fundamental contributor to the valuation process. The provenance (history of ownership) is very important. This is a record of how and when the work of art passed through different hands and at what price. A provenance may also include articles written about the piece, catalogs and illustrations in art books.

Finding comparable works of art that have been sold recently is the other factor that requires research. You can do a quick search on your own, using various online art market research resources to get a general idea of the value, but not the comprehensive report that a professional will produce.

For instance, if you own a lithograph by a popular artist (Warhol, Rauschenberg, Chagall) you can search for similar lithographs to ascertain the auction price that you might be able to realize if you decided to sell. This is a very rough estimate and it does take into account the availability (or scarcity) of the image you own and the condition or circumstances of the sales you have researched.

How To Choose a Professional for a Valuation

“You get what you pay for! Chose only an accredited or certified member from a recognized appraisal organization, (there are three top ones in the US), and make sure they are current with their USPAP accreditation, which must be renewed every two years. Collectors should ask to see an example of the appraiser’s work product, ask for referrals if they do not know the appraiser, and realize that accredited and certified appraisers work like attorneys, by the hour or by the project, not by a percentage.” Xiliary Twil, Accredited Senior Appraiser, Art Asset Management Group, Inc.

Valuations are useful tools for art collectors. The Clarion List includes both art appraisers with general practices and those with expertise in specific periods in their directory.