Question: When valuing Antiques and Collectibles does the purchase price have any bearing on market value?
Answer: Usually not. Unlike most personal property, the purchase price typically does not bear any relation to value.
Question: Wouldn't it be just as good if I took some photographs of my property instead of bothering with an appraisal?
Answer: Certainly photographs and videotapes are much better than no record at all but there are many draw backs to using this as your exclusive evidence of your property. To begin, there's a very detailed process to photographing such property to make it admissible in court or for it to be accepted by your insurance company.
Secondly, photographs alone will not help you know how much insurance coverage you need. It is important to realize this, especially if you consider the fact that most states now impose a $1,000 limitation on silver that has not been listed and evaluated for your insurance
To understand the handicap of working from a photograph without any other written information is that critical details cannot be captured with photographs alone. For example, one cannot determine if a piece is sterling silver, silver plated, stainless steel or pewter. The determination if a piece is brass or copper etc. etc. Good reproductions from originals can be impossible to determine by a single photograph. In such cases, insurance companies have valid reason not to accept photographic evidence of property.
The ultimate drawback of having only a pictorial record of your property is that you will not have a concept of the monetary worth of your possessions. The best record of your personal property is one that supplements a written evaluation with photographs or tapes.
Question: Which approach to value is given greatest weight when valuing personal property?
Answer: Market Comparison Approach
Question: What discounts can be applied to value?
Answer: Depreciation and Blockage.
Question: What is meant by the term "Depreciation"?
Answer: A reduction in value due to impairments.
Question: What factors contribute to Depreciation ?
Answer: There are four basic factors that contribute to depreciation:
1. Physical - The condition of the property if damaged.
2. Functional - The ability of the subject to produce at the same rate and yield the same quality as a new property.
3. External - A reduction in value do to outside influences such as Government regulation.
4. Technological - A reduction in value because the subject was made obsolete or partially obsolete by a similar property that has superior ability.
Question: What is meant by the term "Blockage"?
Answer: A reduction in value due to the fact that a large number of similar properties are being offered at the same time and the market is unable to absorb the supply.
Question: What is the difference between Reproduction Cost and Replacement Cost?
Answer: Reproduction refers to reproducing the exact replica of the subject while replacement refers to reproducing the exact utility of the subject.
Question: What is meant by the term "Net Value"?
Answer: Market value less any loan or encumbrance.
Question: What is meant by the term Marketable Cash Value?
Answer: The net proceeds that would be received from the sale of property within a reasonable time period and in a relevant market.