by Dr. Lori Verderame
Many of us have purchased a home or refinanced a mortgage. As part of this process, financial institutions require an updated appraisal for the home to determine its current market value.
Real Estate vs. Antiques Appraisals
Similar to the written art and antiques appraisals that I provide for insurance purposes, banks require that real estate appraisals show accurate and recent sales documented in the local court records of comparable homes that actually sold.
These appraisals outline the condition of the home, the size of the home, size of lot, etc. Mortgage company approved appraisals DO NOT include prices of comparable homes that are only listed for sale which have not yet sold (like the ones listed in those real estate flyers or newspaper ads). These houses are not comparable sales records until they are sold at that price. The mortgage company does not base their business of loaning money on the fact that “Mrs. Clean” lives in a similar home priced at a certain amount. If a home is still for sale, then it is not a comparable, it may just be overpriced.
Antiques and collectibles price guides are very similar to those real estate tabloids. Often, these guides are sponsored or authored by antique dealers or other people who have financial interest in raising the market price of a Eastlake side chair, mantle clock or Hummel figurine. Real estate firms often sponsor the real estate tabloids, too. Also, many factors such as condition, age, provenance, and authenticity must be considered for each item and individuality it is important to assessing value.
Many collectible and antique price guides do not provide this type of current market information which impacts the item’s value. Even if two houses, each with 4 bedrooms and 2 bathrooms, appear to be the same in that supermarket flyer, their neighborhoods, condition, or other traits could be quite different. And, most likely, they will sell at very different prices. Price guides are only guides and if an item has not sold for a certain price, then it is not a comparable item.
Appraisals Based on Sales Records
My online, verbal, and written appraisals are based on actual sales of similar items in similar condition. When I prepare a written appraisal, I include these actual sales records in the report which is required to meet the standards for such an appraisal.
Since I am not an antique dealer or reseller, I have no interest in inflating the antiques market for any item. Similarly, I do not have an interest in providing lower than market values for items, so I can then purchase these items for a low price from appraisal clients and resell them for my financial gain. This is a common yet unethical practice in my opinion. Watch out for those price guides that are probably guiding you into spending more money than an item is actually worth.