When to Have Artwork Appraised

Photo by Kate Ter Haar

What exactly is an appraisal? An art appraisal is an assessment of the likely market, auction or replacement value of an artwork conducted by an impartial professional who specializes in the type of artwork being appraised and is supported by research and documentation.

There are many ways to value artwork—sentimental, aesthetic, cultural, historic, and financial—and we often have clients ask about when or why they should have artwork appraised. The short answer is that the need for an appraisal often arises when the ownership of artwork is being transferred, and below some example scenarios below to illustrate situations that may be helpful to think about.  

Investing in artwork: If you are buying a piece of art from an artist or a gallery for the first time, the sale price determines the current value of the artwork and there is no need for an outside appraisal. If, however you are buying artwork that is already part of a collection, it may be useful to understand the fair market value of the work before you agree to a purchase price.

Selling artwork at auction: Auction houses and consignment galleries have in-house estimators that help to set the estimated range of auction value for an artwork. It’s worth noting that estimated auction values are typically low due to depression on demand resulting from short sales timeframes and limited buyers. That said, when bidding competitions occur, pricing can escalate rapidly, and remember that it is the market—i.e. the price someone pays for an artwork—that ultimately determines the current market value of the work.

Donating artwork: If you have a piece of art or a collection that you plan to donate to a museum or other non-profit permanent collection, you and the receiving entity will need an appraisal of the market value of the artwork for tax purposes.

Estate related issues: If you have a valuable collection—or are the executor of an estate—and are concerned about equitable distribution, a market value appraisal will likely aid your decision making. If you are the beneficiary of artwork, you may want a replacement value appraisal for insurance purposes.
 
Insuring your collection: A standard homeowners policy may not provide enough coverage for specialized objects or art collections, and knowing the replacement value of your artwork could be important to make sure you have enough coverage. Conversely, if the value of your collection has fluctuated over the years an up-to-date appraisal might save you insurance costs.

While X Gallery does not appraise artwork, we can assist with creating inventory documentation for your collection, which is often the first step toward an appraisal. This includes proof of ownership, sales receipt, provenance, photographs and a record of appraisals and conservation—information that is also helpful for the efficient management of your collection.  We are also happy to recommend certified appraisers and, while you’re your collection is stored with us, we can host appraisers at our location.