Since the onset of the Antiques Roadshow, the hit PBS version of The Price is Right, it seems everyone is obsessed with how much their belongings are worth. But what an item is worth and what you can sell it for are two different things.

The most important method of knowing how much an antique or collectible is worth is a professional appraisal—the paid opinion of an expert based on known facts. In the case of antiques and collectibles, known facts include records from more than one sale at more than one auction, the latest published price guides, and personal experience gained from buying and selling similar items many years.

While a verbal appraisal may give you an indication of how much an item is worth, a professional written appraisal is the only one legally recognized by insurance companies and the courts. It must be based on fact and able to stand challenges in court. However, written appraisals, even for one item, can take hours to prepare and are expensive, but are absolutely necessary to prove an item’s worth.

A verbal appraisal, on the other hand, is an informal one. Usually, the person giving the appraisal spends no time researching auction records and price guides. Therefore, a verbal appraisal is an opinion based on first hand knowledge.

Formal appraisals fall into two categories—replacement and fair market value. Insurance companies require the former, while estate valuations require the latter.

Replacement value is generally defined as the price at which property would be available on the retail market. In other words, what a retailer, dealer or gallery owner would charge for a particular item.

When you try to insure a collection, the insurance company wants to know how much it will cost to replace it. The same applies for a single piece of furniture. The insurance company won’t accept a verbal appraisal as the basis of settling a claim. Instead, they require a written appraisal with proof of replacement cost.

Fair market value, on the other hand, is best described as "the price that property would sell for on the open market between a willing buyer and willing seller, with neither being required to act, and both parties having reasonable knowledge of the reasonable knowledge of the relevant facts.

But whatever the appraised value, you can only expect a percentage of the replacement value when selling an item—generally between 40 and 60 percent below replacement cost. Items that sell extremely slow will sell for only about 30 percent of replacement value, while those that sell fast may bring 80 to 90 percent of replacement value. When you sells an antique or collectible, the buyer is likely to be a dealer, who must buy below market price in order to make a profit.

Fair market value is traditionally used in appraisals that pertain to IRS, equitable distribution, donation, divorce settlement and other estate evaluation matters. It does not apply to insurance affairs.

If you own an item you suspect to be worth a lot of money, it pays to have a professional appraisal done. A professional appraisal adds value to an item and increases marketability. This is especially true for antiques, paintings, and estate jewelry.

A qualified appraiser thinks in price ranges—say between $1,500 and $1,800. Unfortunately, you can’t go to the latest wholesale catalog or "Blue Book" to find the exact antique or collectible currently available at a specific price.

What about price guides? The prices are averages and sometimes estimates, based on auction sales. For tax and estate purposes, the IRS uses auction prices. Even though similar items may sell for different prices at different auctions, on average, prices tend to be within a specific range. There are also regional differences in pricing to consider. You also shouldn’t use retail prices, since dealers use different markups and have different expenses. Additionally, not all dealers are aware of the value of all of their inventory, and many price items based on cost rather than on the item's market value.

The single most important point in valuing antiques is condition. Most items found in mint or near mint condition bring a much higher price than those with flaws. Still, it's very easy to overlook a chip or crack while shopping, especially at live auctions where the excitement is running high.


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