McAllister/Fossum 4-Step Appraisal Process
- Collect all the relevant information about the item(s) to be appraised
- Conduct research to determine values for the item(s).
- Once values are determined, produce the final appraisal report.
- Upon payment , release two copies of the appraisal to the client.
Step 1 – Discovery
If you only have a few items that are portable, the lowest cost option is to bring them to our offices where we can inspect and document them. Documentation includes measuring, photographing, and noting marks, signatures and condition, among other details. If you have a number of items or the items are not portable, we can make a site visit and document the items at your location.
At this stage it is also useful to gather all available information about your items, such as sales receipts, previous appraisals, or family history related to the item’s origins. Based on this initial information, we can provide you with a fee estimate for your appraisal.
Step 2 – Research
In the research phase we investigate the artist or maker of your item and the markets where this maker or this type of item is bought and sold. We make use of a number of exclusive professional databases, our network of colleagues, as well as our extensive experience.
Our aim in this research phase is to find evidence of recent sales and purchases of items that are comparable to yours. Good practice requires that we identify at least three comparables in order to find a mode price—that is the most recurring price range for items comparable to yours. It is important to be able to screen out lows (such as from poor attendance at a single auction) and high spikes in value (such as a bidding war at single auction). The mode value also considers regional differences and the quality and condition of an item.
Depending on the purpose of the appraisal (learn more about types of appraisals), we determine a fair value for your item(s). For example, an appraisal for insurance requires a replacement cost—what you would need to pay if you had to go out and acquire a comparable item today. By contrast, a donation requires a fair market value, which estimates the likely price agreed by a willing buyer and seller who is not under pressure to buy or sell today. Appraisals for other purposes might make use of values for depreciated replacement cost, liquidation, and distress liquidation, among others.
We are able to provide you with an estimated fee range, and we can offer a guarantee that the fee will not go higher than the agreed ceiling . If you need to arrive at a lower fee range, we can discuss which items you may wish to exclude from the appraisal.
Step 3 – Analysis & Reporting
We use our proprietary software to create high quality appraisal reports that are hand-signed and include photographs of your items. You will receive two hand-signed reports, along with a letter of transmittal that lays out the total value of your items combined.
We follow the IRS guidelines for written appraisals, which must include the following sections:
- Statement of purpose
- Description of the object so thorough and precise that one can visualize the item without a photograph (although a photograph is still necessary). Descriptions should include: the dimensions, the title of the object, the artist/maker, a detailed condition report of the article, the medium, the historical associations, and general provenance, if it is important to the valuation and available.
- A summary of the appraiser’s qualifications.
- Basis of value, or the types of replacement costs used for evaluation
- A statement of disinterest indicating that the appraiser did not charge a fee based upon a percentage of the value, is not interested in buying the property, and did not sell the property to the client.
- Date of valuation. For estates, the date of death. For other situations, the date of object examination.
- A high quality, color photograph of the item (an absolute must to establish the quality and condition for the IRS, insurance and divorce litigation).
- The signature of the appraiser and the date the appraisal was done.
- The name and address of the client.
Step 4 – Payment & Delivery
Upon payment, we release the two copies of your appraisal to you.
The initial fee estimate that we provide after inspection of the item(s) usually takes the form of a “low-high” range. Like other professionals such as attorneys, appraisers typically charge by the hour for projects larger than a few items.
The time to complete each appraisal varies for several reasons. First, the research process is not predictable. In some cases, such as a collection of paintings by well known artists, the research may be simple and quick. In other cases, a more obscure maker may be difficult to trace, and comparable values difficult to find. Correspondence with other experts can also slow the process. Second, as service professionals we experience a varying number of clients at any one time. Third, some types of appraisals require more detail than others, which can increase the amount of time required.
There are several key ways to manage your appraisal cost.
- provide as much information as possible concerning the item(s) to be valued. Research is time consuming, and any leads can reduce the time required
- prepare adequately for our on site visit to reduce the amount of time required to document your items. Once you decide to have an appraisal done, you need to prepare, especially if we visit your location. Please review our blog post on preparing for an appraisal at your location.
- provide an advance, typed inventory (by email) with measurements, title, makers’/artists’ names, and a brief description of each piece including relevant receipts, previous appraisal values, pertinent family/ownership history of the item. Although we will still have to verify and inspect the condition of each piece, we will not have to spend time writing down all the details.