PREFACE
Disputes over property are part of the human condition. Often they stem — from estates, divorces, or taxation — incited by questions of value. Value is a vague term and charlatans often pose as its arbiters. That recipe for disaster can exacerbate disputes and lead to unlikely outcomes. My anecdotes are a compilation of some of the more entertaining ones I have been party to. Included in the selection criteria are morals learned, and educational value. Read them for entertainment or to learn something of how things of value are bought, sold, and appraised.
Common law divides all property into two classes, personal property and real estate. Most people who have had occasion to obtain a mortgage are familiar with the appraisal of real estate. It is a well-developed, government regulated, profession. Real estate appraisals conform to commonly accepted guidelines, and residential real estate appraisals follow an accepted format that is often reduced to forms. State licensing provides some assurance of the competency of real estate appraisers. By comparison, the appraisal of personal property is chaos. There is little or no government regulation. Professional organizations do little to police the qualifications and ethics of their members. There is no common reporting format, and anyone who would like to enter the profession has little more to do than hang out a shingle. It is even easier for an incompetent to set up an educational program to scam aspiring students, than make a living doing appraisals.
There are many reasons why appraisals of personal property are so problematic. Most important is that the value of an object is likely to be different to different people and at different times. Value theory has it that a sale will only take place when the subject is worth more to the buyer than the seller. The important question, rarely asked, when an appraisal is undertaken is “Value to who?”
Think of a wrist watch. If what you want is to know the time, a Timex set and running is worth more than new gold Rolex in the box. Similarly a bottle of water in the desert is worth more than one on a pristine lake. The price of a Picasso generally taken to be authentic would be much greater than the same painting found in a garage sale, even though the enjoyment viewing it would be no different. A pair of well broken in boots is likely more valuable to the owner than anyone else. How about dentures? Therein lies the difference between price and value. While conundrums like these would seem like outliers, in real world appraising, they are not. Rather, they are the representative of issues present in disputes, and there would be no personal property appraisal profession except for disputes.
The appraisal of personal property generates much more controversy than that of real estate:
Organizations like the “Antiques Roadshow,” are strictly for entertainment and are of little value to someone looking for an appraisal. For starters they pick and choose the objects for valuation based on the experts on hand, not the other way around.
What started as a break from an engineering career, helping out in a family antique store on Miami Beach, led to my appraising furniture and antiques principally for estate tax returns. That in turn led to appraising machinery and equipment for a variety of purposes. I also served as a magistrate for adjudicating disputes between taxpayers and the county property appraiser in three Florida counties. A resume of my qualifications is on my website at www.ppvalue.com. You can also find a more erudite discussion of appraisal principles on that site under “About Appraising.”
I have chosen anecdotes that provide entertaining lessons in appraising that may be of interest to professionals looking to expand their expertise into different classes of property, or laymen interested in how tangible personal property is bought, sold and valued. Where the parties who are not public figures, or are still alive, I have changed the names and locations to maintain confidentiality. Dialog is as best I can remember, but unlikely to be word for word. While some of the details to the stories may not be precise, the plots and lessons are true. The stories are meant to provide an entertaining learning experience.
Disputes over property are part of the human condition. Often they stem — from estates, divorces, or taxation — incited by questions of value. Value is a vague term and charlatans often pose as its arbiters. That recipe for disaster can exacerbate disputes and lead to unlikely outcomes. My anecdotes are a compilation of some of the more entertaining ones I have been party to. Included in the selection criteria are morals learned, and educational value. Read them for entertainment or to learn something of how things of value are bought, sold, and appraised.
Common law divides all property into two classes, personal property and real estate. Most people who have had occasion to obtain a mortgage are familiar with the appraisal of real estate. It is a well-developed, government regulated, profession. Real estate appraisals conform to commonly accepted guidelines, and residential real estate appraisals follow an accepted format that is often reduced to forms. State licensing provides some assurance of the competency of real estate appraisers. By comparison, the appraisal of personal property is chaos. There is little or no government regulation. Professional organizations do little to police the qualifications and ethics of their members. There is no common reporting format, and anyone who would like to enter the profession has little more to do than hang out a shingle. It is even easier for an incompetent to set up an educational program to scam aspiring students, than make a living doing appraisals.
There are many reasons why appraisals of personal property are so problematic. Most important is that the value of an object is likely to be different to different people and at different times. Value theory has it that a sale will only take place when the subject is worth more to the buyer than the seller. The important question, rarely asked, when an appraisal is undertaken is “Value to who?”
Think of a wrist watch. If what you want is to know the time, a Timex set and running is worth more than new gold Rolex in the box. Similarly a bottle of water in the desert is worth more than one on a pristine lake. The price of a Picasso generally taken to be authentic would be much greater than the same painting found in a garage sale, even though the enjoyment viewing it would be no different. A pair of well broken in boots is likely more valuable to the owner than anyone else. How about dentures? Therein lies the difference between price and value. While conundrums like these would seem like outliers, in real world appraising, they are not. Rather, they are the representative of issues present in disputes, and there would be no personal property appraisal profession except for disputes.
The appraisal of personal property generates much more controversy than that of real estate:
- Prices realized for real estate are public record. Personal property sales rarely are recorded and are often confidential.
- There are thousands of types of personal property, but only commercial and residential real estate.
- The value of personal property is more dependant on context, use and depreciation.
- There are many different marketplaces that personal property can be bought and sold in.
Organizations like the “Antiques Roadshow,” are strictly for entertainment and are of little value to someone looking for an appraisal. For starters they pick and choose the objects for valuation based on the experts on hand, not the other way around.
What started as a break from an engineering career, helping out in a family antique store on Miami Beach, led to my appraising furniture and antiques principally for estate tax returns. That in turn led to appraising machinery and equipment for a variety of purposes. I also served as a magistrate for adjudicating disputes between taxpayers and the county property appraiser in three Florida counties. A resume of my qualifications is on my website at www.ppvalue.com. You can also find a more erudite discussion of appraisal principles on that site under “About Appraising.”
I have chosen anecdotes that provide entertaining lessons in appraising that may be of interest to professionals looking to expand their expertise into different classes of property, or laymen interested in how tangible personal property is bought, sold and valued. Where the parties who are not public figures, or are still alive, I have changed the names and locations to maintain confidentiality. Dialog is as best I can remember, but unlikely to be word for word. While some of the details to the stories may not be precise, the plots and lessons are true. The stories are meant to provide an entertaining learning experience.
