are prepared for the following uses:
Insurance - to have
insurance that will cover your valuables, insurance professionals
have suggested considering the following criteria:
- Property exceeds $250.00
- Market is not commonly known
- Characteristics that indicate the property’s
value might not be recognized
- If the property needs to be insured by scheduling
There are also times that an appraisal is needed
in support of a claim
Donations – IRS requires
an appraisal if the item or group of items donated exceeds $5000.
IRS publications with additional information are Publication 526,
and Form 8283.
Estates – Appraisals are
needed frequently at times of crisis such as divorce, death, or
whenever the estate must be divided. Appraisals are therefore an
important part of estate management and planning.
– Not an appraisal, but an opportunity to
discuss things with a professional, have property evaluated, and
Written appraisal -
The purpose and intended use is clearly indicated.
- Summary – has all the information on the
item, and the value (see section on what elements an appraisal
- Self-contained – has all the same information
in addition to all the information and notes gathered by the appraiser
Replacement Value (Used for Insurance)
- Comparable – price required to
replace a property with another of similar age, quality, origin,
appearance and condition within a reasonable length of time in
an appropriate and relevant market.
- Cost New – cost to replace a property
with an equivalent or substitute which is new, using modern materials,
techniques and standards.
- Reproduction Cost – cost to reproduce
a replica of the property at current costs.
Fair Market Value – price
at which the property would change hands between a willing buyer
and a willing seller, neither having any compulsion to buy or sell
and both having reasonable knowledge of relevant facts. (Used for donations and estates.)
Market Value – similar
to fair market value except that the provision for lack of compulsion
to buy or sell is removed and the assumption of a sale with a specified
time frame is added. (Used if desire is to sell or buy.)
Liquidation Value – price
in terms of cash if sold quickly
- Orderly – property changes hands
in an orderly; generally advertised, with reasonable time constraints,
in a relevant market
- Forced – sold immediately
to learn about the appraisal process...