do birks appraisals overstate value of piece

[whotheyare]

just got appraisal back from birks and its little less then i expected, are they more strict with their appraisal than other appraisals? anyone had any experience? and how much can u sell it for in terms of the appraisal value of birks appraisal?

thanks

 

[denverappraiser]

Call up your appraiser and ask them. It should say in the body of the report what marketplace it is that they are describing and, unless you specifically requested it at the time of your session, it’s probably not a value for resale. If they didn’t ask then it’s reasonable to point out that they’ve answered the wrong question. If they asked and you told them to look into some different market for value, like insurance replacement or ‘retail’, then you ASKED the wrong question. Either way, part of what you’re paying them for is to help you to understand their conclusions. If something seems unreasonable to you, feel free to ask questions and point out what seems out of whack and why. If there's an error they should be happy to fix it, if there's not they should be happy to explain it.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[whotheyare]

just says cost to replace item as new not including taxes does that mean resell value?

 

[denverappraiser]

No.

That means the price that they would it expect it to cost at retail to replace it with another new one like it in the case of a loss. Often it involves an assumption that it will be necessary to custom make it. This is quite different from what you can sell it for and there is no direct conversion from one to the other. A custom made new item at a store is usually significantly more expensive than what you can expect to get for a comparable used one.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[stebbo]

Date: 12/14/2007 1:48:59 AM
Author: whotheyare
just says cost to replace item as new not including taxes does that mean resell value?

Neil, Rich, Jeff..., is this the norm, not including tax on appraisals?

 

[denverappraiser]

Stebbo,

This is a hotly debated topic among appraisers and it gets discussed at every training class or conference.

The problem is that tax is handled differently in different jurisdictions. Not only does the rate change from place to place but some states have different rules for insurance proceeds than they have for more ‘regular’ type purchases. Obviously this is not a value characteristic of the property but rather a function of the details insurance contract and the address of the insured. Is it really a question for the appraiser?

On pre-loss insurance appraisals, I usually include it although I’m in a minority at this. I think it benefits the client to have sales tax specified as one of the covered areas and, if the insurance company isn’t required to pay for whatever reason then they don’t have to. My position is that the company is obligated to pay the necessary costs to make the client whole again in the case of a loss and complying with all legal taxes is just part of the requirement. I’m pretty specific about defining what marketplace we’re discussing in the report and, if that marketplace involves sales taxes, I included it. Some insurance contracts will separate address this issue.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[stebbo]

I like your way.

Thanks for taking the time.