Why Have Your Artwork Appraised?

An Interview with Shelley Hall, California Art Appraiser

Q: Shelley, let's start with the obvious: How does one go about becoming an art appraiser? What does one have to study? How is one certified? How long does the process take?

A: The process of becoming an accredited or certified art appraiser takes a minimum of three years of experience appraising the personal property you normally appraise. I chose the International Society of Appraisers, but you can also go through the American Association of Appraisers or the American Society of Appraisers. All three are the top recognized appraisal organizations recongnized by the IRS. It starts with an extensive background and reference check and you are admitted to candidacy. You then complete courses in Appraisal Core Studies and Practices and pass the final exam. Then you are admitted to member status once you have satisfied the requirements for three years of full time experience appraising. I chose the next level which is Accredited, and that is achieved once a specialty class is completed in your chosen specialty. I am now have the Accredited Designation from the International Society of Appraisers with a specialty in fine arts.

Q: What is the purpose of having one's art collection appraised? What justifies spending money on this service?

A: I do appraisals for Insurance Coverage, Charitable Contributions and IRS deductions, Equitable Distribution (usually a divorce or estate), Estate Tax Liabilities and re-sale valuation. It depends on the type of artwork you have and the value. Most insurance companies do not require an appraisal unless the value is over $5000, but some prefer to have all of the appreciable assets (art, & antiques) to be separately listed on a separate insurance "Schedule" It is called Scheduling in Insurance terms. The IRS now requires a "qualified appraiser" for all artwork donations over $5000 and household contents over $500. The IRS definition of "Qualified" includes membership in one the accepted appraisal organizations.

Q: There are so many kinds of art, and so many periods, that it seems very complicated for a single appraiser to dominate them all. Do appraisers have networks of colleagues to help each other out in difficult cases?

A: Yes, that is exactly how we all work. I use experts through the ISA (International Society of Appraisers) whenever I have items outside of my experience, like Japanese Prints and African Art. That way I know they are conducting their research and reports exactly the same way I am. I act as the on-site appraiser and project manager and will subcontract with necessary experts.

Q: The photographs on your website look like a gallery setting. Is Shelley Hall Fine Art also a gallery?

A: I opened a contemporary art Gallery in January of 2006 called Shelley Hall Gallery. I realized quickly that having a retail space took time away from my painting and my work as an art consultant and appraiser, so I closed the space last year and went back to the original name of Shelley Hall Fine Art.

Q: We're curious to know how appraisers put a monetary value on works of art. Presumably the value varies in different settings and for different purposes. It's not the same to pay an auction price as to pay for the same work of art in a gallery. And the insured value may have nothing to do with either of these sums. How do appraisers clarify these issues for their clients?

A: In each written appraisal, we are required to state the intended purpose (IE Insurance) and the definition of the value (replacement cost new/used). For charitable contributions and estate tax, the value is calculated using Fair Market Value as defined by the IRS, and auction market is typically the value sought.

Q: If a client/collector has paid $10,000 for a work of art, does that mean the value of that work of art is worth at least the amount paid?

A: Unfortunately not always. If there are three other galleries selling similar works by that same artist in the same size and genre for $5000, then the replacement cost for Insurance purposes is $5000. The IRS and appraisal organizations all use terms like, "Most likely market" and "Willing buyer and a willing seller" and "most likely price"

Q: How do appraisers charge for their services?

A: Most appraisers charge by the hour and for larger jobs, it can be fixed cost with a not to exceed price.

Q: If a gallery or dealer tells a client that a given work has been appraised at a certain value, how does the client confirm that affirmation?
A: Ideally, clients should get an objective appraisal from an independent appraiser. We are bound by ethical rules not to have a conflict of interest, as in appraising a piece we have sold or buying a work of art we have appraised.

Q: Who orders more appraisals, buyers or sellers?

A: Usually it is buyers, but lately I have had a lot of requests from people wanting to liquidate their collections.

Q: Is it common for artists to have their own work appraised, either for commercial, insurance or legacy purposes?
A: It is a good idea for estate planning purposes, unless the artist has never sold or exhibited their work.

Q: What should a client keep in mind when he or she is considering having artwork appraised. Are there "tricks to the trade?"

A: Clients should keep in mind that we don't have all of the information in our heads, but we know where to look for the information. I couldn't possibly remember every artists name or dates, but I can tell what time period to look in and where they might have studied. We also have subscriptions to trade databases which include auction records, signature examples and biographical information about artists.

Q: Is it common for clients about to embark on an important art aquisition to commision an appraisal of their own, rather than trusting the appraisal of the seller.

A: It is common for high value items to have either an independent art advisor or an art appraiser to be consulted to determine a fair asking price, especially when buying at auction.

Q: Inevitably, appraisals from different appraisers must vary somewhat. What is considered a normal variation from one appraiser to another for the same piece of work.

A: We are taught that with the research and due diligence that another appraiser having the same information would also come up with the same numbers, so it should be really close, if not exact.

Q: Is appraising an art or a science or both?

A: It is definitely both. There are guidelines and specifics we need to abide by, but there is no set formula. We are supposed to go my the MODE, most often occurring number, but sometimes that is not possible, and we can go by the MEAN (average). Sometimes there is only one comparable, so you can not do either. You obviously have to use your common sense, which is your background and experience in buying, selling or exhibiting artwork. If you are appraising a figurative work of an artist and they only things they sold were landscapes, you would have to research to see if figurative was more or less valuable or in demand than landscapes, and by how much.

Q: Do sellers have ways of influencing appraisal values?

A: A competitive auction between two rivals or competing bidders can dramatically raise the comparables of the artwork being purchased.

Q: Art fraud is rampant. Do you think appraisers could play an important role in limiting it?

A: Appraisers have a definite role in educating the public about value. We do not authenticate artwork, but I would coordinate with an expert if the piece required authentication. I recently appraised two reproductions that were very good, but the experts decided they were fake.

Q: Do people corner you at parties and ply you for advice on collecting and investing. What do you tell them?

A: Most people have something that they either inherited or were given that they believe may be worth something. We all want to think we have the great gem in the attic. I recently did one appraisal for a friend and it turned out the piece was worth $450,000. So it does happen.

Q: Is there anything you would like to add? We're all ears.

A: Most people have not had appraisals done and are doing it for the first time, so ask whatever questions you need to. I forget and assume that people understand but in reality may be shy to ask questions, because they look uninformed. There are no bad questions.