The first step in the appraisal process is to find out what the client needs and why. Owners of Soccer Memorabilia may need an appraisal done for several reasons. A different reason may require a different scope of work from the appraiser and a different type of value for the client.
Litigation, IRS, and Government
Appraisers are often called on to value personal property in the case of disputes such as a divorce or family division. The IRS requires returns with donations over a certain amount to include an appraisal for the items included.
In most of these of these circumstances appraisers are often required to provide what is known as Fair Market Value (F.M.A.). F.M.A. is the estimate of the market value of a property, based on what a knowledgeable, willing, and unpressured buyer would pay to a knowledgeable, willing, and unpressured seller in the relevent market.
In order to establish this value, appraisers will often use recent auction sales of items most similar to those appraised. This research can be included in the appraisal report. and is referred to as "comparable sales."
Often, an owner of property may want to now what their item(s) will likely sell for at auction or in another market. In this case, an appraiser will research comparable auction sales but will include a range of values since it can be difficult to predict the location of sale and exact sale price. For example, an owner wants an appraisal of several match worn shirts, so the appraiser then finds sales of similar items and includes a market value or range of $500 to $1,000 for the item. This intended recipient of such a report is usually just the owner and its intended use is to educate the owner about the potetial resale value of their property.
Insurance Claims and Coverage
An appraisal can be completed for insurance claims and coverage since many insurance carriers will not cover collectibles without an appraisal.
For an insurance appraisal an appraiser would most likely use what is known as replacement cost and use comparable sale prices from the retail market. An insurance carrier will often consider that value in compensation to the owner in the event of a loss. Replacement cost is the monetary amount that it would cost to purchase or reproduce an exact or closest possible representation of the original.
In the event of a significant loss, an insurance company will often require a second appraisal. The appraiser can inspect damaged items to determine the degree of loss.
As a general rule owners are encouraged to take good photos and keep documentation of their insured goods.
What is an appraisal?
An appraisal is a statement of property value, often formulated by an educated professional known as an appraiser. An appraisal report can be typed or oral, and specifies the client's reason for the appraisal (known as intended use). A report will often include the inventory of and the monetary value for the item(s) appraised. The type of value used will be defined by the appraiser, according to the intended use of the appraisal by the client(s). An appraiser will also include the rationale for the type of research and value that is used.
Once an appraiser understands the purpose of your appraisal and the nature of the item(s) to be considered, the appraiser can then determine an estimate of amount time it will take to inspect the item(s), research comparable sales (in the relative markets), and then formally complete and send the report to its necessary recipient(s).
Listed below are the different types of appraisal reports that can completed by Touchline Appraisals.These include appraisals related to:
- Insurance Claims and Coverage
- Litigation in cases of Divorce or Family Distribution
- Resale Value
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