FAQ

HOW DO APPRAISERS DETERMINE VALUES?

Depending on the type of property and the appraisal assignment, appraisers will use one or more of the following approaches to valuation:

• Comparable Market Data Approach – The most common approach for personal property appraisals. Value is determined by comparing the appraisal item to similar items.

• Cost Approach – Value is determined based upon the price of the components comprising the property. This approach is often used for works by an artist whose work has never sold or who has a limited sales history. It is also used for donation appraisals when the donor is the artist him/herself.

• Income Approach – Value is determined based on the amount of income the property can potentially generate. For example, appraising a work that is a showcase within a museum collection and generates income through ticket sales.

 

WHAT IS THE PROCESS FOR OBTAINING AN APPRAISAL?

Each appraisal assignment is unique. Generally the appraisal process consists of the following steps: 

• Inspecting and photographing the objects to be appraised (either on-site or in our office)

• Reviewing existing client paperwork

• Completing artwork descriptions using our extensive library and other references

• Researching the value for each object by consulting the proper sources in the appropriate marketplace(s)

• Compiling a written, professional appraisal report following USPAP guidelines that will pass the scrutiny of an insurance company, the Internal Revenue Service, or other intended user.

 

DO YOU AUTHENTICATE WORKS OF ART?

Appraisers do not authenticate works of art. However, every effort is made to properly identify the appraised objects by reviewing client paperwork and referencing catalogues raisonnés and other appropriate research materials. Additionally, we are able to facilitate the authentication process by corresponding with the recognized committee, foundation and/or expert for a particular artist. There may be fees associated with facilitating the authentication process such as photography, shipping, and administrative costs. The authentication process varies depending on the artist and the type of art in question. For some artists, there is a foundation which issues certificates of authenticity. For other artists there are one or more scholars or family members of the artist who are the identified expert to authenticate works by that artist. Quarry Fine Arts is able to advise on how to authenticate works of art and to coordinate the authentication process on behalf of the owner of the art property.

 

HOW MUCH DOES AN APPRAISAL COST?

The fee to prepare an appraisal depends on several factors, including the purpose of the appraisal, the number of objects to be appraised, the amount of descriptive and provenance information provided for each object, and whether or not there are multiple similar works by the same artist. Appraisals are billed on an hourly or project basis depending upon the scope of the work and are never contingent on the appraised value of an artwork or collection. 

 

WHAT ARE YOUR QUALIFICATIONS?

Our firm has extensive experience appraising art of all media from the mid-19th through late 20th Centuries. Our staff is extremely knowledgeable on art market issues and dedicated to objective research and analysis of market data and trends. Quarry Fine Arts has appraised art in every level of the market, from widely affordable prints by emerging artists to multi-million dollar paintings by modern masters. All of our appraisal reports comply with the standards set forth in the Uniform Standards of Professional Appraisal Practice (USPAP) of The Appraisal Foundation and the Code of Ethics of the Appraisers Association of America. 
 

WHAT IS A ‘QUALIFIED APPRAISER’ AND WHY IS IT IMPORTANT TO WORK WITH ONE?

Qualified Appraisers, as defined by the IRS, are designated by a recognized appraisal organization, such as the Appraisers Association of America (AAA), and demonstrate verifiable education and experience in valuing the type of property being appraised. Quality Fine Arts is an AAA-certified member and qualified by the above standards.

 

A qualified appraiser has an in-depth knowledge of the primary and secondary markets for the particular collecting category being appraised. He or she should have an academic background in the collecting category, as well as at least 10 years of experience working in the market for that particular collecting category. A qualified appraiser should have up-to-date certification in Uniform Standards of Professional Appraisal Practice (USPAP). 

 

Independent appraisers, have no financial interest in the property they are appraising because they do not buy or sell the subject property. Auction houses and galleries often offer an appraisal for clients. However, because their main business is buying and selling, they are not an impartial appraiser, and therefore do not meet appraisal standards.

​

WHAT IS A VALUATION PROJECT?

A project that includes a statement of value established through a comprehensive analysis of the market in which an object is usually sold. Additionally, the valuation is presented in a written document and will assume legal significance that may have to be defended in a court of law.  A valuation is synonymous with an "appraisal."
 

WHY IS THE PURPOSE OF THE VALUATION IMPORTANT?

The purpose of the valuation is to establish a value basis for an object. There are various ways of establishing value including Fair Market Value, Replacement Value, Marketable Cash Value, and Liquidation Value. Each value can be very different and is found in distinct marketplaces. Certain entities require certain types of valuation. For example, the IRS mandates Fair Market Value for estate tax and charitable donation purposes. Insurance companies use Replacement Value when writing policies. 

 

WHEN DO I NEED A VALUATION FOR A CHARITABLE DONATION?

Taxpayers wishing to receive an income tax deduction above $5,000 for art donated to charitable institutions are required to obtain a “qualified valuation” written by a “qualified appraiser.” A “qualified appraiser” is defined by the IRS (IRS Publication 561; 11/2013) as “an individual who meets all the following requirements:

• Must have successfully verifiable education and experience in valuing the type of property being appraised, i.e., completed college or professional-level coursework relevant to the property being valued;

• Has obtained at least two years of experience in the trade or business of buying, selling, or valuing the type of property being valued; and/or earned an appraisal designation from such professional organizations as the Appraisers Association of America;

• Has earned an appraisal designation from a recognized professional appraisal organization or has otherwise met minimum education and experience requirements to be determined by the IRS in regulations;

• Regularly performs appraisals for compensation;

• Has not been prohibited from practicing before the IRS by the Secretary of the Treasury at any time during the three years preceding the conduct of the appraisal; and

• Has not been excluded from being a qualified appraiser under applicable Treasury regulations.”

 

In addition to defining a qualified appraiser, the IRS, under the Secretary of the Treasury, also provides a definition of what constitutes a qualified appraisal report submitted for a claim involving a taxpayer: “An appraisal prepared by a qualified appraiser (defined previously) in accordance with generally accepted appraisal standards and any regulations or other guidance prescribed by the Secretary of the Treasury.”

HOW OFTEN SHOULD I UPDATE VALUES FOR INSURANCE PURPOSES (REAPPRAISAL)?

Fine art insurers generally recommend updating values every 3 to 5 years. However, tracking values of high-net-worth works of art that may be more volatile in the marketplace may warrant re-appraisal every 1 to 3 years.

CAN THE VALUE OF A WORK OF ART BE DETERMINED FROM A PHOTOGRAPH?

The ideal situation in conducting a valuation appraisal starts with a personal inspection of the object(s). Concerns with condition, authenticity and age are not always apparent in photographs, and entities such as the IRS prefer that the appraiser personally inspects the work(s). In certain circumstances, work can be appraised from a high quality photograph. However, when an appraiser cannot inspect the work firsthand, it is stated in the appraisal report as a limiting condition and extraordinary assumption. 
 

WHAT IS THE DIFFERENCE BETWEEN FAIR MARKET VALUE AND REPLACEMENT VALUE?

Fair Market Value (FMV) is defined by the IRS Tax Code, Section 1.170 and 20.2031(b), as “the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of the relevant facts.”  Fair Market Value is typically used for charitable donations and estate tax purposes. 

 

Replacement Value (RV), also known as Retail Replacement Value (RRV) or Retail Value  refers to the price in terms of cash or other precisely revealed terms that would be required to replace a property with another of similar age, origin, appearance, provenance and condition within a reasonable length of time in an appropriate and relevant market. It is typically required for insurance purposes.

 

WHAT IS USPAP?

USPAP, or Uniform Standards of Professional Appraisal Practice, is a set of standards, competence, and methodology put forth by the U.S. Congress for both art, personal property, and real estate appraisals. 
 

HOW LONG DOES IT TAKE TO COMPLETE AN APPRAISAL?

Turn-around time is dependent upon the nature and scope of the project. Typically, appraisals are delivered four to six weeks from either the final date of on-site inspection or from the date Quarry Fine Arts is engaged to complete an appraisal. In certain circumstances, however, turn-around time can be expedited and shortened if necessary for an additional fee.
 

DO YOU OFFER APPRAISALS ON PIECES YOU SELL OR ARTISTS YOU REPRESENT?

As a private dealer, Quarry Fine Arts represents a select group of modern and contemporary artists in a variety of mediums. Following USPAP guidelines, we do not offer any appraisals of works we have sold within the past five years. 
 

DOES QUARRY FINE ARTS HAVE A MINIMUM PROPERTY VALUE FOR APPRAISALS OR ADVISORY?

No. Quarry Fine Arts appraises and advises on property at all price points.
 

WHAT IS AN ART ADVISOR OR  FINE ART CONSULTANT?

An Art Advisor and Fine Art Consultant are one and the same. They are a professional whose comprehensive knowledge within the field of art provides clients with the necessary insight and resources to meet their objectives; an art market specialist who provides advice to inform clients’ decisions when buying and selling art. For clients acquiring art, this includes sourcing particular works of art for the client, providing market insight into price, quality, condition, negotiating sale price, and providing representation at auction. For clients selling works of art, this includes advising on where, when and how to sell to maximize returns or meet other client objectives.

 

HOW ARE ART ADVISORY SERVICES BILLED?

Advisory services are typically billed on a commission basis. However, in some cases, it is more appropriate to bill on an hourly or project basis. 

 

WHY DO I NEED AN ART ADVISOR?

The art market is the largest legal economy to be almost completely unregulated. Fakes and forgeries, inflated prices, undisclosed condition issues, and lack of clear title are some of the pitfalls art buyers can face and from which they are not definitively protected by current legislation. A qualified art advisor understands the marketplace, how the various players, such as dealers, auction houses, buyers, sellers and conservators interact with one another, and the right questions to ask to ensure the buyer is making an informed decision. For individuals looking to sell works of art, a qualified art advisor will be able to advise on how, where and when to sell in order to maximize returns or meet other selling goals. Time, geographic location and venue for sale, as well as financial terms of the sale deal, marketing, and other factors play into the sale outcome.

 

AS ART ADVISORS DO YOU FAVOR THE ARTISTS YOU REPRESENT?

As art advisors we have connections and access to a wide variety of artists that extend far beyond those we represent and we will always suggest the piece that is right for you. Our commission structure is such that there is no financial incentive for QFA to favor a specific artist.