By Stephen M.H. Braitman
It often starts with a phone call. Someone has passed on, and a spouse, son, daughter or other relative has to deal with all the stuff that person collected during a lifetime. The call is placed because there are these records, see, and — you can hear the frustration in the caller’s voice — “What am I supposed to do with them?”
The caller asks for an appraisal, because, after all, that’s what you’re supposed to do with personal property, right? Get it appraised so you’ll know the value, and then you can satisfy probate, or creditors, or taxes, or just so the other relatives will stop yakking about how much of a piece of pie they want. Get it appraised so you can sell it and finally make some money back on that strange hobby he had.
More and more people realize, of course, that that “strange hobby” can result in some significant windfall income. What goes through their minds: Records, they’re rare, aren’t they? They don’t make them any more. They’re really old. Why, this one is, it’s 30 years old! And it’s in brand new condition. It must be really valuable!
An appraiser interacts with a whole range of humanity when it comes to understanding what people have and what they want. Mostly folks don’t know what they have and don’t know what they want. The appraiser’s responsibility in these circumstances is to help guide people to appropriate choices. For one thing, they may not need an appraisal. Let’s step back a moment. What is appraisal? Formally speaking, an appraisal is a statement of value. That statement is the end result of a whole system of analysis, a comprehensive argument to value, as it were.
Yes, there are plenty of expert collectors and dealers who can tell you the “value” of a given record. But they won’t be giving you an appraisal. The statement of value in an appraisal is formed by using a methodology called the Uniform Standards of Professional Appraisal Practice. (Appraisers affectionately call it USPAP, pronounced “use-pap.”)
USPAP was formulated over many years by a nonprofit organization in Washington D.C. called the Appraisal Society. The society worked with other professional groups, like the American Society of Appraisers, and government bureaus, like the Internal Revenue Services, to arrive at a legally acceptable method for conducting appraisals.
The key here is “legally acceptable.” The IRS pretty much calls the shots, and has decided that it will accept only USPAP-compliant appraisals for any value above $5,000. If you’re hoping to donate your collection to a university archive, or you’re involved in a property settlement issue, or anything else where the law is involved, you’ve got to hand in a USPAP appraisal to justify the value you’re claiming on your collection. This could be anything from thousands of 78s or just one signed Beatles album, however the $5,000 threshold is reached.)
USPAP provides a road map for an appraiser in how to conduct an appraisal. Everything from ethics to paperwork retention is covered. The key to finding value is in comparables. You can justify a value if you find the same or similar items having sold for near the same amount, in the same kinds of circumstances as would be considered normal, such as auctions, private dealers or online sources.
The appraiser’s power of persuasion is important in describing the material and why it is considered relevant as a comparable. For unique items, such as signed artwork or an historical artifact — think John Lennon’s Bentley or the hand-carved sign at the entrance to Michael Jackson’s Neverland Ranch — the challenge is that much greater in considering the factors that go into giving something value. Appraisal is actually part science, part art.
Now, appraisal is not necessarily mandated for everything, but some situations warrant consideration for having one. For example, you might think your insurance company is going to hand you the $10,000 policy you’ve got your rare records insured for if they get lost in a fire or damaged in a flood. Think again. The insurance company was very happy to sign you up for $10,000 in coverage and charge you premiums. But making a claim? The first thing the company will ask is: What are those records worth? Absent an appraisal, expect to receive a normal per-unit used record price. Maybe that’ll be $1 per disc. Maybe.
The way to protect yourself is to get an appraisal done BEFORE coverage is granted. File your appraisal with the insurance company when you apply, and then both parties agree to the relevant kind of appraised value, that is, replacement value comparable. If the insurance company agrees to this, there’s no problem getting fair reimbursement for damages and losses. Only a USPAP-compliant appraisal will help guarantee this.
Suppose, however, you want to know the value of your records (or CDs, or posters, or trading cards or T-shirts or photographs or anything else under the very wide umbrella called music memorabilia) because you want to sell them? Essentially, you need to know if you have $50 worth or stuff, or $500, or something else. You want to know where you stand, or, at least, where you could stand if the buyers come or the bidders bid.
In this kind of situation, you don’t need an appraisal. There’s no legal use here for the information contained in an appraisal. Thus, the amount of research, tracking, analysis and writing that takes so much time in an appraisal — and could cost significantly — is overkill for your needs.
What you need then, is an evaluation. This is a more informal, less analytically rigorous way to arrive at a value. It may not be legally acceptable (not USPAP-compliant), but it will give you the information you need. And, ultimately, the value — called fair market value — should end up being close to what a formal appraisal would be, since the method of finding price levels in the marketplace is about the same. It is possible to turn an appraisal into an evaluation, if the need arises; but, remember, an evaluation can’t be used as an appraisal.
So, finally, that caller ends up knowing that his collection of records is either worth a full appraisal based on his needs, or that he should just figure out in broad strokes how good the potential on eBay is going to be. In either case, the caller is relieved to know he has the information to make the right choices.
This process also achieves the larger purpose of respecting the legacy of that relative who assembled the collection and is no longer around. It’s gratifying to the appraiser to know he’s done a little bit more than just put dollar signs out there on some stuff.
Stephen M.H. Braitman is a music writer and collector. Yes, it’s old, but no, sorry, “Thriller” is not a valuable record. Braitman also is a music appraiser; visit www.MusicAppraisals.com.