From Worthwhile Magazine, by Sarah Reeder, Fine Art & Antiques Appraiser
"Not Like on TV: Appraising is a Professional Service like Law or Accounting
This opinion piece is the article I’ve been trying to figure out how to write for years, the one that reflects the private conversations that frequently occur between fellow appraisers and one that highlights and begins to untangle the many inaccurate perceptions about the appraisal profession that hurt both the field and the people who rely on our services. To begin: appraising is absolutely nothing like what is shown on television. The many popular television programs that feature what the general public perceives as appraising depict only a tiny percentage of the time, meticulous research, years of preparatory scholarly study, and financial overhead that truly go into the process of reaching a defensible appraised value for a particular object. The television programs are not appraising – they are entertainment.
They are great entertainment, and I want to be very clear that I am not attacking them or the respected experts who appear in them in the article, but rather trying to educate the general public about the full expanded context of what is involved in our work. It is not at all interesting to watch appraisers plod through the hours of careful work needed to do our jobs responsibly, and I completely understand why the television programs edit out the boring content for viewers. I know that there is a great deal of research behind the scenes to prepare for every brief filmed segment that is not included in the final cut that airs, and I don’t mean to imply that the experts on the programs haven’t carefully prepared. Their professional services are simply just not fully shown to the viewer. For a two-minute clip, there may be five hours of meticulous preparatory research we never see. I loved watching those same television shows growing up, and I think they are a wonderful way to educate about art and antiques and promote interest in collecting. Please don’t send me hate mail about this because my intent is not to criticize the shows but to show what happens behind the scenes. A perhaps unintended side effect of the immense popularity and wide viewership is that many in the general public now think appraising is just like what you see on TV. When they engage an appraiser, they expect the appraiser will show up and instantaneously start rattling off appraised value numbers for every object they see, without doing any research and quickly giving specific value numbers on the spot. There is also an expectation that this is “fun” for the appraiser, and they are doing it as a volunteer pleasurable pastime rather than as a business that pays their bills and supports their families. No one would ever expect that a lawyer or accountant is doing their work because it is “fun,” and they like it as a pleasant hobby, even though appraising is very similar to these fields. Due to the perception that appraising is both “fun” and easy, taking almost no time due to the apparently miraculous ability to know an object’s current value in the market without doing any research, there is a corresponding assumption that appraising should be a low-cost or free service. This is completely inaccurate. These perceptions have been very damaging to the appraisal field over time, undercutting the appraiser’s ability to earn a livelihood commensurate with the significant work and professional responsibility that goes into our services. We encounter immense pressure to deliver performances just like what someone saw on TV, but this is impossible to do while still complying with the formal regulations we are governed by under the Uniform Standards of Professional Appraisal Practice (USPAP). Potential clients are disappointed and upset that they aren’t getting their own version of what they expected from the television programs. Some can be unwilling or reluctant to pay what it really costs to have USPAP-compliant appraisal services. It creates a very negative and damaging dynamic where clients can feel misled about what to expect when engaging appraisal services, and many appraisers feel like they have to continually undercut themselves and operate at a razor-thin profit margin for the extremely complicated and time-consuming work they do to even survive in business and continue to book new clients. Appraising carries a great deal of responsibility and risk. An appraiser writes legal documents in the form of USPAP-compliant appraisal reports, and every appraiser must be ready to defend their appraisal reports in court if needed. Appraisers are required to create workfiles for every client and retain them for a specified period of years, just like lawyers are. Under the Gramm-Leach-Bliley Act, appraisers are classified as financial institutions and bound by the same confidentiality restrictions to protect our clients that banks are. It is recommended that appraisers pay for specialized insurance for professional liability, and the research and data in every single appraisal report must be supportable. It is not a blithe process of stating a value number in a few minutes like what is shown on television. This disparity between the reality and the imagined ideal of appraising is something appraisers frequently grouse about in private, but there is a reluctance to publicly point out the problems this has caused for fear of being seen as criticizing the television programs and our respected fellow colleagues who appear on them. This is not my intent at all, but I feel that it is our job as appraisers to help correct the misleading assumptions about our field acquired through the popularity of television programs. As part of this, I also want to highlight the existence of the previously hidden research and specialized connoisseurship work of our colleagues featured on the programs that are not shown to the viewers. I am not criticizing the television programs at all, but rather footnoting what is not shown because it would be incredibly dull to watch. Educating about what appraising is really like helps all of us by establishing a dynamic where users of appraisal services are aware of just how challenging and meticulous our work is, and appraisers can benefit from greater respect for our professional services. This will allow more appraisers to operate appraisal businesses that are profitable with fee schedules that reflect the true value of the professional services we provide rather than leaving the field and closing their companies. A vibrant, thriving community of professional appraisers benefits both the field and the users of appraisal services who will have a stronger array of appraiser options to work with. Now that I have this very long preamble out of the way, I’ll dive into the education. Appraising is a professional service like legal counsel or accounting. Of all the possible careers, what I do is closest to being a lawyer or an accountant. I research and synthesize my original findings into a formal written legal document following strict regulatory standards, and the valuation analysis I provide has financial and legal implications for my clients. The responsibility is huge, and it is something I take very seriously, as do my fellow colleagues in the appraisal field. An appraiser’s USPAP-compliant appraisal report can determine the amount you receive as a monetary settlement from your insurance company if your house is destroyed, the amount you receive in a divorce settlement, the amount you can take a deduction for in your taxes if you donate an item to a qualified charitable organization, the amount an estate is taxed, and many other critically important situations. You don’t want someone to blithely rattle off an appraised value number for this. You want careful, detailed and highly professional analysis to arrive at an objective valuation that is supported by data and defensible in court if needed. This is not a low-cost service.
An appraiser’s fee schedule is similar to hourly rates commonly charged by lawyers and accountants, because the professional services all three professions provide are so similar in scope and significance. This is often a shock to users of appraisal services based on their familiarity with the popular television programs. Being an appraiser also requires financial investment in often-expensive services to maintain our professional responsibilities. Some of these professional overhead costs include: -Annual premiums for professional liability insurance and other insurance policies for the business -Annual dues for membership in an appraisal professional organization, which is highly recommended as a sign of professional standing -Annual subscription databases costs for the art and antique market data needed for our research -Health insurance premiums: most appraisers operate their own businesses and are forced to purchase their own health insurance individually rather than have it available from an employer. Mine is nearly $1,000 a month now. -Continuing education tuition costs: USPAP-compliant appraisers are required to take a USPAP update class every two years, and the professional appraisal organizations require extensive continuing education hours in specialized connoisseurship education about art and antiques in order to be able to keep your membership -Business operating costs: as most appraisers are business owners, they are responsible for the annual costs of their corporate entity for their state and local business taxes, federal business taxes, payroll for any employees they may have, and software and marketing costs like a website
-Many, many other costs: specialized equipment like cameras to photograph works we are appraising and reference books like catalogues raisonné (which are extremely expensive) These are just the basic operating costs, and I’ve summarized the major ones rather than include an exhaustive list. Next, I want to give some expanded context about what the actual work of appraising really looks like.
In my previous article for Artwork Archive “Demystifying the Appraisal Process,” I described the major steps of a typical appraisal assignment, so I will not cover that content in-depth here but rather invite interested readers to check it out at the following link if they’d like: https://www.artworkarchive.com/blog/demystifying-the-appraisal-process. What I want to do here is illuminate a side-by-side comparison of what viewers might see in one of the television programs versus the reality of what it usually looks like behind the scenes for an appraiser. In this example, I’m going to use a hypothetical imaginary painting being appraised for insurance coverage and compare them below.https://www.artworkarchive.com/blog/demystifying-the-appraisal-process On the program: A brief two-minute film clip where the owner talks about how his parents had the painting, it hung over the fireplace for forty years, they didn’t pay much attention to it but he decided to take it down and bring it today… then the expert starts talking and says who the artist is, gives a short history of the artist’s life and career (mysteriously being able to give lots of specific details off the cuff), and then finishes by saying “I would insure this painting for $50,000.”
Real life for an appraiser: The appraiser has eight emails and two phone calls with the client answering their questions and figuring out the best scope of work for the client’s needs before scheduling an on-site appointment (assuming this is not during a pandemic). The appraiser drives through an hour or more of traffic to the client’s house, then sits down with the client and where the client talks about how his parents had the painting, it hung over the fireplace for forty years, they didn’t pay much attention to it. Still, he decided he’d better call an appraiser and get it added to his insurance policy when his agent suggested he didn’t have enough coverage currently. The appraiser does a detailed inspection of the painting, blacklighting it for signs of inpainting and searching for any areas of damage. The appraiser measures the painting and takes many photographs of it, both overall and from several angles, with details of the artist's signature and a very small area of damage. The appraiser collects a signed contract detailing the terms of the appraisal assignment and project retainer deposit from the client and then drives home again through traffic. The appraiser downloads the pictures, catalogs the painting in the USPAP-compliant appraisal report format, and formats the pictures to include them as illustrations in the appraisal report. The appraiser studies the market for the artist who created the painting and identifies three different galleries that regularly offer works by the artist. None of the three have any available pricing for the paintings by the artist currently in the inventory. The appraiser contacts all three galleries to inquire about the private pricing of the available paintings by the artist closest in size and subject to the client’s painting. One gallery completely ignores her inquiry despite repeated messages spread out over a respectful length of time, one calls her up to yell at her for even asking (true story, this has happened to me before). The other eventually answers after three weeks saying the painting the appraiser inquired about is available for $50,000. The appraiser is then able to complete the insurance appraisal report, appraising the painting at $50,000 and writing a narrative explaining the research process and how that data was acquired and which galleries did not answer or refused to cooperate, and finishes writing all the other written sections of the USPAP-compliant appraisal report such as the Scope of Work and the General Market Analysis that are customized for each appraisal assignment. The appraiser’s final report for a single painting is twenty-five pages long and it is delivered to the client along with an invoice for the rest of the appraisal project time. The client can then give the report to his insurance company and is well-protected with his coverage in the event of damage or loss of the painting. Do you see the differences between these two scenarios? Nobody wants to sit through a program showing the second scenario (except perhaps desperate insomniacs), but the second scenario is much more representative of what appraising truly is like. As appraisers, we are like lawyers or accountants. This is why it is so time-consuming to do our jobs properly and why appraising is not a low-cost service. I hope this article will be just the beginning of a continuing and increasingly open discussion of these issues and that others in my field will join in and add their voices in the future. There is room for both the (incredibly entertaining) programs and a more accurate public perception of the work we really do. It is my aim that the two can coexist peacefully in support of each other going forward. Sarah Reeder, AAA, ISA CAPP is Co-Editor of Worthwhile Magazine™ and owner of Artifactual History® Appraisal. She is also the creator of the online course SILVER 101: Quickly Learn How to Identify Your Sterling Silver and Silverplate to Find the Valuable Pieces and Sort with Empowered Confidence, available on-demand at https://artifactualhistory.teachable.com/p/silver-101. Sarah can be reached at her firm at https://www.artifactualhistory.com/ "