Estate Appraisal Services Hampton Roads
APPRAISALS – What kind and When?
“We really got ripped off,” my friend recalled as he shared his memories of settling his grandparents’ estate. Although he was too young to remember the details of how the estate sale was managed, it was his father’s bitterness about the proceeds of the sale, years after the experience that still haunted his memories. Now that his mother had moved to assisted living, he, with her Power of Attorney and personal instructions needed to dispose of her living estate. Faced with a daunting economy, a “slow market” he was determined to get the best prices possible to assist with her expenses. He vowed never to live with the bitterness and regret his father had endured.
Like many people, his mother’s home and other personal property made up the majority of her total estate value and if he wasn’t going to repeat his father’s mistake, he needed advice and insight into the myriad areas of concern including a realistic expectation for sales, establishing adequate insurance on items his mother wanted to keep in the family, fair distribution to the family members and the proper value of charitable donations for IRS purposes.
After our initial needs assessment meeting, we proposed qualified appraisers to provide valuations for his variety of needs. The goal was to provide my friend a far greater value in his peace of mind by knowing in advance at what auction house, and in what locality a buyer might expect to pay – or as the seller – what he should expect to receive, even in today’s market fluctuations.
We explained the differing definitions of appraisal value …
Full Replacement Value and Liquidation Value are the opposing ends of the appraisal spectrum, with Full Replacement being the high end and Liquidation Value being the low end.
Full Replacement appraisals are generally the higher value quoted, taking into account the extreme conditions one might encounter when trying to locate and replace the same exact item at full retail. Replacement Value appraisals conform to Uniform Standards of Professional Appraisal Practice (USPAP), are accompanied by written research and are dated and signed by the professional appraiser. This type of appraisal is helpful when you need to acquire insurance on personal property that you or your senior has decided to keep in the home.
Fair Market Value is the value that typically falls in the middle of Full Replacement cost and Liquidation Value, most often referred to as a “hammer-price” or as sold at auction price. Fair Market value represents the price that someone is willing to pay at that point in time, and at a particular auction house in a particular city and state. For instance, prices received in New York City are often dramatically different from those one could expect to receive in Norfolk Virginia!
A Fair Market Value appraisal is what the IRS requires when a charitable donation exceeds a predetermined dollar amount. As IRS rules are ever-changing, the website www.irs.gov can be accessed for the latest information for charitable deductions.
There is also a General Market Value which is an opinion of what the item would generally sell for. For instance, when you walk into an antique store or call a private dealer the verbal quote you receive will depend greatly on the dealer’s experience, education, and knowledge of the item.
That is why an antique dealer in one area may give you a value quite different, either higher or lower than the original person that you consulted.
Last is a Liquidation Value, the prices one might receive when an estate (either living or deceased) is liquidated. Estate or Tag sales are typical fair market sales venues, but when a liquidator purchases the entire estate, it typically at a very heavy price. The liquidator assumes the risk of reselling to achieve his profit margin.
It was also important for my friend to know that the values of personal possessions constantly change as nearly everything sells in cycles. The physical condition of the item is the primary constant factor in establishing value.
Just because something is old does not equate to a higher value. It might be old, but cracked, broken, covered in mold; or, totally deteriorated resulting in much lesser value than if in excellent condition.
Also, where and when an item is manufactured or crafted, its popular desirability, the economy, all influence whether or not the things we have considered junk now have substantial value, or conversely, certain items may now have little or no value due to constantly changing demands of the buying public.
Beanie Babies are a perfect example; once finely crafted and highly valued – now – made in China of lesser quality results in a collectible value of a fraction of what they once were “worth.”
When it was time for a fair distribution to the family, we discussed why it was very important to use the appraised values for internal fairness. The most essential factor is that all items are “valued” at the same appraisal approach. This way all family members know that the division of property is fair and equitable.
I further explained you might experience different values of the same item, if someone has provided you a written appraisal for a Replacement Value of $300, and someone – a dealer – says “your item is worth about $200,” but then you only receive $50 at auction, that doesn’t mean you have been ripped-off.
Auction price or “hammer price” represents the Fair Market value; what the seller is willing to sell and the buyer to pay at that specific point in time and location, while the $200 quote represents a general market value; the replacement value is researched photographed and documented at $300 – the cost one would expect to pay to locate and replace the same exact item in the same exact condition.
After discussing the detailed appraisal information with my friend, we began to evaluate each piece based on what he wanted to achieve: keep, sell (where and when) recycle and donate.
After items were categorized, we arranged the appropriate appraisal services. He contacted his insurance agent and purchased adequate insurance on items that were being kept.
We inventoried, counted, photographed then provided Fair Market appraisals for the charitable donations, arranged for the charitable pickup, and obtained the charitable donation receipt for his tax records.
Upon completion of the disposition of his mother’s estate, my friend was at peace knowing he had done the absolute best he could do for his mother and his family.
Certified Senior Advisor (Ret.)
Moving On! Services LLC
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Moving On! Services LLC services all of Hampton Roads to Richmond Virginia, Central Virginia, and areas east to include York and Gloucester County, and the Eastern Shore. MOVING ON! provides a Single Point of Contact for as much or as little that needs to be done – related to the disposition of household items and personal property. First consultations are always free.
Our services include Downsizing Lifestyle Change, Appraisals and Auctions, Estate Liquidations, and Senior Move Specialists. Above all, we have the expertise for Aging in Place services. For example, Personal Shopping, Errand, Sort, Space Planning, Pack, Move, Unpack, Redecorate, Reorganize, Charitable Donations, Books & Bibles, Disposal of Surplus Possessions, Deep Cleaning, Organizing, and Redecorating.