Wondering What Your Item is Worth?
If you’ve inherited a few items, recently found or purchased something you’d like to flip, or simply have some property you’re ready to part with, and if the property falls in the less significant category, your best path forward may be to contact an auction house rather than an appraiser.
Auction Houses Offer Free Estimates
For property that has genuine market value, and which is being considered for sale, auction houses will typically provide informal preliminary auction estimates for no charge (provided you are seriously considering selling). They’ll typically share some general market feedback, whether they think it’s a good candidate for auction, and outline their terms and conditions of sale if they are interested.
This costs you nothing. It’s how their business works. They earn a commission when the item sells; until then, their expertise is complimentary.
For the purpose of selling moderate to low value items, that assessment is often exactly what you need. It reflects current market conditions, buyer demand, and the house’s direct experience selling comparable property.
Why a Formal Appraisal May Not Make Financial Sense
Conversely, a professional USPAP compliant appraisal report is a highly structured and formal document. They are often lengthy, time consuming, and meticulously prepared, intended to both identify items, determine the value, and provide factual evidence to support the value conclusion under scrutiny. A qualified appraisal is not cheap, the fee is owed regardless of outcome, and for moderate items or collections, the appraisal cost can be substantial relative to the value of the property.
Consider a typical scenario: a collection of 250 various antique items, with a total fair market value of $25,000. A professional appraisal of 100 unique items could cost in the $10,000 range, depending on a variety of factors, and the appraiser CANNOT charge based on potential value. In this scenario, when you eventually sell, auction commissions will take another 25 to 35 percent of the sale proceeds. By the time you add moving, transport, and incidental costs, then subtract the $10,000 appraisal fee, you’re walking with $5,000 or less on a $25,000 collection.
Or, another example, you have five antique carved ivory figures you’re thinking of selling, worth around $1,000 each, or $5,000 total. The cost to appraise these five pieces, depending on their complexity, could run in the $1,000 – $2,000 range, possibly eating up more than half the potential proceeds.
In many such cases, the cost of a formal appraisal simply isn’t warranted.
When an Appraiser Is the Right Call
Formal appraisals are more appropriate when multiple parties are involved, such as the IRS, situations of litigation, an insurance company, equitable distribution, etc. In those situations, a brief informal estimate won’t suffice. You need a credentialed, USPAP-compliant document prepared by a qualified appraiser, to explain, reason, and justify the value to all parties involved.
But if your goal is simply to sell low to moderate value items, often an auction house is your best source of information. An appraisal for potential sale makes most sense when the property has significant value.
The Short Version
Auction houses often provide free market feedback for property you’re looking to sell. In many cases, they can be one of your best resources. If your situation ultimately calls for a formal appraisal report due to function or significance, that’s what I’m here for.
Finding the Right Auction House
Not all auction houses are created equal, and some less reputable operations are best avoided. The right house depends on various factors, including the property type and location. We’re happy to provide recommended auction house contacts.
The Expert Appraisal Company provides USPAP compliant appraisal reports to clients nationwide. To discuss an appraisal engagment, contact us here.
