Dealers turning to appraisals as income source

Economic times have been tough during the past year for antique dealers and collectors alike, and prognosticators predict that 2010 is shaping up to be pretty flat as well.

In such times, antique some dealers have sought ways to enhance their bottom lines, and a number of them are turning to appraisals as a way to accomplish staying in the black.

Robert Simon, owner of Robert Simon Fine Art of New York City and Tuxedo Park, N.Y., is both a dealer and appraiser, and also a past president of the Appraisers Association of America.

“Appraisals have always been something that dealers have been asked to do,” Simon said, “but in the past a lot more dealers had more liberal standards and less concern for legal issues. Some would even approach it in a haphazard fashion.”

But more antique dealers are taking appraisal work seriously now, Simon believes.

“The stakes are higher and so is the potential liability now,” he said. “And there’s more demand from collectors for the service, so more dealers are needed who can do appraisals properly, and thus there’s more interest in the appraisal organizations.”

Other groups certify appraisers besides the Appraisers Association of America (AAA) — the Appraisers Guild of America (AGA), the International Society of Appraisers (ISA) and the American Society of Appraisers (ASA), among them.

Such organizations teach, support and test their members through regular education courses that include subjects such as identification, ethics, report writing, fine art, antiques and residential contents, and expert witness classes. The groups also require their members to adhere to a code of ethics.

Dwight and Christy Schannep, owners of the American Antique Mall in Tucson, Ariz., recently became certified through the International Society of Appraisers. Antique dealers for the past 20 years and mall owners for 17, Dwight Schannep said they finally found enough time to expand their services to include appraisals. Their appraisal company is American Heirloom Appraisers, LLC, and like their name, specializes in American antiques.

“It seemed like a natural step for us,” he said, “so we researched the different certifying organizations to determine which ones were the most respected by attorneys, probate officers and the government.”

Christy Schannep pointed out that becoming an appraiser isn’t simply a one-time thing where you pass a class. “You have to commit yourself to testing and continuing education,” she said. “You do the training and testing, which is there to make sure you’re absorbing the information and become confident in what you’re doing.”

Dwight Schannep noted that “an antique dealer has to wear an entirely different hat when appraising instead of dealing. You have to disclose if you have any interest in the property you’re appraising, if you’ve ever sold that property or desire to own the property in the future,” he said. “You must have full disclosure.”

Reasons why people seek appraisals include for valuation of estates, insurance coverage valuations, equitable distribution for heirs of an estate and damage appraisals, among others, Dwight Schannep said. Charges range from $100 to $300 an hour, depending on the number of items to be examined, photographs to be taken, the amount of research needed to be done and the reports that have to be written, he added.

Another form of certification — one the government and especially the Internal Revenue Service seeks out — goes by the acronym USPAP — Uniform Standards of Professional Appraisal Practices.

Gayle Skluzacek is the owner of Abigail Hartman Associates on Central Park West in New York City, an appraisal firm specializing in fine and decorative arts. Skluzacek also teaches the USPAP course at New York University and also at locations around the country.

“Many dealers haven’t been selling so much in terms of true antiques, but they don’t want to give the stuff away by dropping prices precipitously,” Skluzacek said. “So they’re looking at alternatives and one of them is appraising.”

She pointed out that “people always want to know what their stuff is worth,” so it makes sense for individuals already in the collecting business to expand their reach.

“There are some forces pulling in different directions in the appraisal markets right now,” she said. “The insurance companies are not looking for appraisals right now because those appraisals would reflect the lower market value of collections. On the other hand, the IRS and clients want appraisals for a variety of reasons – some people may need to take out a loan against their artwork or they may be embroiled in a divorce. In either case, they’ll need an appraisal.”

The USPAP course is a 15-hour, two-day affair where the student must pass an examination at the end.

“I have about 400 students every year in my USPAP courses,” Skluzacek said. “In the past, I would have about a half dozen antique dealers taking the course annually. In 2009, about 30 antique dealers took the USPAP course.”

Skluzacek noted that USPAP doesn’t test a person’s knowledge of antiques, rather it focuses more on appraisal ethics. “It defines what you are doing to the standards of the industry so the users can trust the document created by the appraiser,” she said.

Her advice to antique dealers taking the USPAP course: “As a dealer, you’re used to a different pace,” Skluzacek said. “With appraising, it’s a lot more tedious, but the rewards are there. And with appraising, you’ll get paid for your work, whereas a dealer may do a lot of work in trying to sell an item and still end up with no sale.”

Tom Helms, owner of AZ Appraisal & Estate Consultants in Phoenix, Ariz., is an ISA certified appraiser and a generalist who performed 111 appraisals last year.

“The conception of appraisers today is only in dealing  with antiques and collectibles,” Helms said, “but appraisers have become deeply involved in homes with general items which is the bulk of our business now, working with attorneys, fiduciaries and banks.”

Helms is often called in by banks or trust attorneys to do an assessment of value of an estate for court records, file records or equitable distribution. “We help the agents and attorneys regarding any questions concerning what’s to be sold and what the value was before the items were liquidated,” he said. “We’ve gone into nominal estates and found $30,000 paintings and items of significant value. Our job is to point them out to the trust department to protect them from liquidation.”

Judith Martin, owner of the Perfect Thing in Wheaton,  Ill., and president of the International Society of Appraisers in Chicago, said her group has seen a lot of activity with antique dealers getting into appraisal work.

“What was once an adjunct for antique dealers is now real working capital for their businesses,” Martin said, “especially those dealers working in high end antiques. A lot of our members are doing more appraisal education in order to be competitive in the marketplace.”

ISA offers a core course in basic appraisal methodology, she said, as well as a requalification course for USPAP and an advanced report writing course for those appraisers likely to be doing work for court cases and estate appraisals. “Those kinds of appraisals have to hold up to IRS regulations and USPAP requirements,” Martin pointed out, “as well as any state requirements.”

Martin added that “no appraiser knows everything, so most specialize in specific areas. I personally do a lot of divorce work,” she said, “and one has to know when to bring in the correct source of help and value those areas correctly that are outside the scope of your interest.”

Martin specializes in late 19th century and early 20th century furniture and decorative arts.

“I’m not a clock expert, but I know who is in the Chicago area,” she said. “Likewise, I’m not a fine arts specialist, but I’ll bring one in or a gemologist for jewelry in an estate when needed.”

Martin calls appraising the who, what, when, where and why of a piece.

“The provenance of a piece is getting to be as important as the piece itself,” she said, “especially with the kinds of fakes that are available now. But with appraising, you never stop learning – each job gives you a different problem or scope of work that teaches you something you did not know.”

Alan Petrillo is a former antiques dealer and freelance writer based in Tucson, Ariz. 


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