The Specialists – ISA Featured in Canadian Art’s Collecting Guide
What Art Appraisers and Advisers Can Offer
ISA members are highlighted as specialists in the Canadian Art Collecting Guide.
These experts provide independent valuations of art, along with strategies to organize and build a collection, among other vital services.
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“You might wish to reach out to an appraiser to seek assurance against art market risks, such as paying too much for an artwork, selling too low, being over- or under-insured, ensuring a fair division of property from an estate, and reducing chances for tax penalties or audits when claiming charitable contributions,” explains Kelly Juhasz, president of the Canadian chapter of the International Society of Appraisers.
“In advisory services, clients are looking to me to narrow the search and make recommendations on artists that I feel confident in,” Kathryn Minard explains. “And from my connection with the client, I will also get a feel for how that corresponds with what the artist is saying.”
Here’s a few more important points for new collectors.
What two things do you think art collectors, especially those starting out, should know about art appraisals and the art appraisal process?
1. For new and experienced collectors, always work with a qualified appraiser – someone who is trained in the theory, principles and standards that pertain to both valuation and evaluation. Appraisal is a combination of an inexact science requiring study and the application of a learned methodology. To be a qualified fine art appraiser, one must have experience in the fine art industry, higher education in fine art and specialized knowledge in the valuation of fine art. International Society of Appraiser (ISA) members, for example, must also continue their learning by taking niche courses in advanced valuation methodology and attend presentations and short courses on the various genres of fine art. They are professionals in fine art and other treasure assets.
2. Art trades within a marketplace. And like all items in a market, prices go up and down. New art collectors, in particular, need to understand that not all fine art increases in value. Working with a qualified appraiser to value your collection every 3-5 years, will help you learn how the fine art markets – primary and secondary – work. An appraiser can help you understand the value characteristics in buying fine art, and the market trends and transaction costs in selling part of your collection. They can assist in making sure your estate needs and insurance requirements are adequate.
Provenance research is one of the services some appraisers provide. What does provenance research consist of, and why is it important?
Provenance is the history of ownership of an artwork. Provenance is important for all works of art, but particularly for older works. Researching provenance consists of tracing directly back to the artist, if possible, who has previously owned the work. This helps ensure authenticity and it helps determine if the work had been stolen, subject to restitution or is jointly-owned and is free to transfer title to a new owner. Provenance also assists in the salability of the work in the market as sometimes the story of past ownership is as interesting as the artwork itself. A past owner who was a celebrity or someone of historical significance can increase an artwork’s value.
To research provenance, an appraiser will want to talk to the current owner and find out as many details on when, where and how they acquired the work. It is important for collectors to keep as much documentation as possible about each artwork they purchase or inherit including the sales receipt, exhibition or auction catalogues, reviews and news articles about the work or the artist at the time the work was created, photographs of the artwork or copies of the will listing the beneficiaries. This information helps to establish and record provenance that will follow the artwork long after the current owner’s enjoyment.
How long does the appraisal process take, and why is that time worthwhile?
The time it takes to conduct an appraisal varies based on the number of works being appraised, the artists involved, and the purpose of the appraisal. On average, an appraisal process takes about 4 weeks. The appraiser creates a letter of engagement with the client that outlines the process, purpose, inspection details, fees and terms – a contract for services so there is a mutual understanding and agreement around expectations of services. It is important to note that appraisal fees are based on the time it takes to conduct the necessary evaluation and valuation and are not tied to the value of the artwork.
The appraiser has to inspect the artwork (in person is always best but quality photographs can be used in some cases) to assess condition, take detailed photographs, note the materials used to create it, record any inscriptions or writing on the work, and measure it. The appraiser then researches the current market for that artist to determine which and where the best market is. The appraiser may have to reach out for additional information or to verify information from dealers and gallerists, conservators, curators, librarians, archivists or other appraisers and therefore needs time to receive responses.
The report is then written to accepted appraisal industry standards. It won’t be a one-page report nor a hand-written report. A collector should never accept a report that is one-page or hand-written. Typically a report by a qualified appraiser is 8-12 pages or much longer depending on the number of works being valued. And it is confidential. A qualified appraiser will never share information about the client, the estimated values or details of the contents of a collection or the report without permission.
Why spend the time and resources on getting an appraisal done by a qualified appraiser?
A qualified appraiser provides you with an unbiased and thoughtful opinion of value upon which you can base your financial and family decisions. Your professional advisors are depending on that report to assist you as well. Your insurance brokers, financial managers, trust officers and estate lawyers need to depend on a justified valuation. Too often and too late, it is discovered that valuation reports by unqualified appraisers are inaccurate or misleading, biased or without justification.
Is there anything else you think collectors in Canada, particularly those just starting out, should know about art appraisal?
Collectors should know that working with a qualified appraiser can save them time, money and worry. A qualified appraiser ensures transparent and rigorous reports, guarantees dependable value justifications, eliminates conflicts of interest and reduces the potential for fraud. Qualified appraisers are current members of established organizations such as the International Society of Appraisers (ISA) and are held accountable for their opinions of value. They work to a high set of report writing standards, use a recognized valuation methodology with accepted definitions and approaches to determine values and abide by a strict code of ethics.
Collectors need to understand the true value of their personal property, learn to increase or downsize collections intelligently, and expand their network of experts to include a qualified appraiser.
