USPAP Compliant Appraisal: Integrity and Accuracy in Art Valuation
“I’ll just do my own research…”
“Let’s just use eBay…”
“I’m just going to go to the antique store down the street…”
I’ve heard sentiments like these over and over again in my career, and I always have the same response:
“It’s just not that simple.”
There is so much more that goes into discovering an item’s true value. After two decades as an appraiser, I understand that appraisal is both an art and a science. As a member of the International Society of Appraisers, I am a Certified Appraiser of Personal Property with the ISA (CAPP). This means my team and I are trained in the highest standards for integrity, accuracy, and professionalism as set forth by the Appraisal Standards Board.
I’ve got hundreds of stories that show the importance this has in an appraisal. But let’s just start with this one:
A few years ago, I was brought on by a client to look at a prospective estate sale. They had already had an appraisal of the estate completed by a third party—someone who was not part of an appraisers’ association and therefore not USPAP-compliant. As I walked through the home and reviewed the appraisal, I began to notice some holes. Valuable items, including a unique Russian icon, were not listed on the appraisal and there were no accompanying photos. My appraiser senses started tingling and I immediately connected with my client.
In order to quell my client’s nerves, my team and I pulled a few special items from the home to do more research on. We included the Russian icon in one of our auctions, and it sold for an incredible $175,000. After seeing how we caught the previous appraiser’s error, our client had us complete a second, updated appraisal for the home’s contents. It was our knowledge and expertise that caught a six-figure mistake.
When it comes to your cherished possessions—whether it’s art, antique furniture, or a family heirloom—you want to work with appraisers who will carry out these USPAP standards so that you can feel confident that you’re getting the most fair and accurate value for your items (the first time!).
What is USPAP?
The Uniform Standards of Professional Appraisal Practice (USPAP) were established by the Appraisal Standards Board (ASB) of the Appraisal Foundation, a professional organization that promotes high standards in appraisal methodologies. USPAP sets the guidelines for ethical and performance standards for the appraisal profession in the United States. Although initially developed for real estate valuations, USPAP standards have been widely adopted across various appraisal disciplines, including fine art.
USPAP-compliant appraisals are essential for several reasons:
- Ensuring Accuracy: In the art world, the value of a piece can vary significantly based on factors such as provenance, condition, market demand, and rarity. USPAP standards help ensure that appraisers conduct thorough research and analysis to determine accurate values.
- Maintaining Integrity: USPAP guidelines require appraisers to act with impartiality, objectivity, and independence. When appraisers follow these guidelines, clients are assured that the appraisal is not influenced by external pressures or conflicts of interest.
- Legal and Financial Relevance: For estate planning, insurance, or tax-related decisions involving art, a USPAP-compliant appraisal provides a document that is recognized by courts, tax agencies, and insurance companies. This compliance adds a layer of trust and reliability to the appraisal, which can be critical during audits or legal disputes.
- Professionalism and Ethics: Adhering to USPAP standards helps appraisers maintain a high level of professionalism and ethical conduct, which is essential for building trust with clients and maintaining a positive reputation in the industry.
How Does a USPAP Compliant Appraisal Work?
Step 1: Engagement
The appraisal process begins with an engagement between the client and the appraiser, where the purpose of the appraisal and the involved property are clearly defined.
Step 2: Research and Analysis
The appraiser conducts thorough research, examining the artwork’s physical condition, history, and provenance, comparing it with similar items in the current market. This step often involves consulting databases, auction results, and other market resources.
Step 3: Valuation
Using the information gathered, the appraiser applies appropriate valuation methods—cost, market, or income approaches—to determine the value of the artwork. The chosen method depends on the nature of the artwork and the purpose of the appraisal.
Step 4: Documentation
The appraiser compiles a detailed report that adheres to USPAP standards. This report includes the appraiser’s credentials, a summary of the appraisal process, the valuation data and methodology used, and the final estimated value. The documentation ensures transparency and provides a comprehensive record of the appraisal.
Why Choose a USPAP Compliant Appraisal?
Choosing a USPAP-compliant appraiser ensures that you are working with a professional who is committed to upholding the highest standards in the appraisal industry. This choice not only brings credibility to the appraisal itself but also protects you legally and financially. At Stefek’s Auctioneers and Appraisers, we recommend and rely on appraisals that meet the highest standards, ensuring that all transactions are conducted with integrity and accuracy.
Whether you’re a seasoned art collector, an investor, or looking to settle an estate that includes fine art, understanding and utilizing the services of a USPAP-compliant appraiser is invaluable. Adhering to these standards is your assurance that the value assigned to your cherished art pieces is as accurate and unbiased as possible.
For more information on how to navigate the complexities of art valuation, visit us at Stefek’s Auctioneers and Appraisers. Our team of experts is here to provide guidance, support, and expertise to handle your art valuation with professionalism and precision.
