Dec 10, 2009

What Antique Dealers Can Learn From Encyclopedia Britannica

photo courtesy of
In 1993, Encyclopedia Britannica had the most profitable year in the company's history. Two years later, the company was nearly bankrupt and was sold for below book value. What happened in those two years? Most folks would say that Britannica was done in by Microsoft Encarta. In 1993, Microsoft purchased rights to the Funk & Wagnalls Encyclopedia, created an electronic version, changed the name to Encarta, and began bundling Encarta with new computers. Encarta could be purchased off-the-shelf for around $50. Britannica sold for around $1200. Competition from Encarta killed Britannica.

Dec 5, 2009

Three Ways An Antique Business Can Surive The Downturn

lagging sales
For those who do not follow the antique trade, let me bring you up to speed: the antique business is in the toilet. Prices are at their lowest level in a decade, following the boom of the 1990s. Antique furniture is selling for 70-80% less than it sold for in 1998. Inventories are piling up. The customer base is shrinking, because the new Gen X buyers are not that interested in antiques, especially large furniture pieces.

Many antique dealers are giving up the trade. Other dealers swear that the downturn is just part of the normal business cycle, and that sales will rebound. These optimists point out that with prices so low, new buyers are attracted to collecting antiques.

Certainly the market has dropped; I cannot argue that point. And, certainly many dealers are going out of business. The question on everyone's mind is: which dealers will survive?

Nov 30, 2009

How the Antique Business Can Recapture Gen X

Today, the antique business has a new problem: old customers. Boomers and their parents, who have been collecting antiques for decades, no longer have the room or the inclination to buy more antiques. Their Gen-X successors do not seem to care for antiques. "The trend is away from antiques", says Red Whaley, owner of an antiques business in Forney, Texas since 1968. "I think it skips a generation. You just do not want what your parents had". Attend any antique show in the US, and all you will see is a sea of silver hair and bald heads. This leaves antiques dealers in a quandary: their customer base is shrinking, sales are plummeting, and they are buried in inventory.

The shrinking customer base is just phase one of the problem. When millions of boomers start to downsize and the antiques they have been collecting for decades hit the resale market, prices will plunge as well. There will be an overabundance of supply, and very little demand. Boomers that bought antiques as an investment are in for a rude awakening. In many cases, they will not recoup their original investment.

The antiques trade has tried everything to hook new buyers: scotch tastings, seminars, door prizes, even handwritten invitations. Little progress has been made in capturing the pocketbooks of Gen X. Why are they not buying? I think that Richard Whaley, Red’s son, hit the nail on the head when he said: "it is more functional now. We sell a lot of (decorative) mailboxes".

Functional; that is the key word. I have often been told by Gen X'ers that they do not buy antique furniture because it does not fit the needs of modern technology. An antique flat-top desk has no place to run computer cords, store cd's or comfortably place a monitor and keyboard. Old wooden office chairs are not ergonomic and one cannot sit in them for hours at a time. Even starter apartments have walk-in closets that make armoires obsolete.

The twin essentials of furniture making have always been form and function, or beauty and usability. For boomers and their parents, furniture was for sitting, eating, or sleeping. Simple functions. For the Boomer antique collector, beauty of form lent an added dimension to the simple functions of furniture. Function was a given. Boomers bought because the Form was beautiful. For Gen X’ers, the opposite is true. For them, furniture provides a place to eat, sleep, sit, play video games, and sit for hours at a workstation for work or socializing. Function takes precedence over form. The furniture has to perform. Beautiful antiques that do not function well in the Gen X lifestyle are an impediment. Why would they buy them? For Gen X, buying decisions are made on the basis of performance, not beauty.

How, then, do we sell to Gen X buyers? We stop trying to sell beauty and investment as our primary sales pitches. This is easiest to do with accessories and occasional pieces. Sell function first, then beauty, then investment. Functionally, a lamp is a lamp. An antique lamp will work as well as a new lamp, plus it has the added benefits of being unique, beautiful, and a good investment. See what I mean? Start by selling function. You cannot use that approach with a roll top desk. It is not functional in terms of the Gen X lifestyle. What does that mean for your business? Re-evaluate your inventory. If an item is not functional for the Gen X buyer, liquidate it or you will soon find yourself with a store full of inventory you cannot sell. Start buying inventory with Gen-X functionality in mind, and eliminate anything that does not fit that profile.

Gen X buyers will not completely furnish their homes with antiques as their parents have done but the market for accessories and occasional pieces will continue to be strong. As an added bonus, these smaller pieces are easily shipped. That makes them ideal candidates for online selling, which is where Gen X does a lot of their buying anyway.

Nov 25, 2009

Seven Fatal Mistakes Consumers Make When Relocating

I continue to read horror stories from consumers about their bad experiences with moving companies. The refrain is always the same: the big, bad, moving company overcharged me, damaged my goods and will not pay up. Well, I have appraised moving damage claims for over 25 years, and I can tell you that the problem is not just the moving companies. Consumers invite problems, because they do not understand the moving process or the terminology. Consumers put more research into buying a new television than they put into being sure that everything they own is moved safely and affordably.

Typically, there are Seven Fatal Mistakes that consumers make when they relocate. A Fatal Mistake occurs when the consumer fails to take action to protect their own interest. These Seven Fatal Mistakes can be avoided. If consumer know where the hazards in the road are, they can be prepared for them when they come.

The purpose of this article is to point out the Seven Fatal Mistakes so that consumers can avoid them. At the conclusion, I will suggest a solution to the problems presented.

Fatal Mistake Number One is that consumers have no idea of the value of their belongings. Households are charged according to the weight of their shipment, the value of the shipment, the distance shipped, and what extra services are required. If you do not know what your household goods are worth and what they weigh, how will you know if you are being charged correctly?

Fatal Mistake Number Two is that consumers found their movers on the internet instead of asking for referrals. The Federal Motor Carrier Safety Administration estimates that only about a third of all internet moving brokers meet federal registration requirements. That means that two out of three moving companies are operating outside the rules. Yet, most people start their search for a mover online. Yes, there are many reputable companies to be found online. But, find your mover the old fashioned way: ask for referrals.

Fatal Mistake Number Three is that consumers do not research the company they hire. The moving industry is filled with rogue movers who will hijack your goods and hold them for ransom. There are many fly by night operators who simply change their name when the claims and fines pile up. There are companies with terrible safety records and lapses in insurance.

Fatal Mistake Number Four is waiting until the last minute to book your move. You should book your move at least eight weeks in advance, six weeks at a minimum.

Fatal Mistake Number Five is that consumers did not get everything in writing. The rule for a moving contract is this: if it is not in writing, it did not happen. Know what you are signing and what paperwork is needed. Any changes to the original service order must be in writing.

Fatal Mistake Number Six has been an issue on every damage claim I have ever appraised. Do not mess up on this one: check the movers inventory exception sheet thoroughly before signing it. The inventory exception sheet is written in code, so make sure the codes are explained to you before you sign it.

Fatal Mistake Number Seven is signing the delivery receipt before the truck is unloaded. Signing the delivery receipt is an admission that all your goods were received in good condition. You do not know that until the truck has been unloaded and everything has been inspected.

At the beginning of this article, I promised you a solution to these issues. Here it is: get a copy of the free fifty page book How To Protect Yourself From Moving Scams And Frauds. You can download your free copy at

Good luck with your move.

Nov 9, 2009

How To Collect Art Confidently

I have spent the last six months as a Fine Art Auctioneer aboard cruise ships sailing in Northern Europe, the Caribbean, and Alaska. The crowds at my auctions were a mix of veteran art collectors, newbie art collectors, the curious,the bored,and the lost. Some of them bought art, but most did not. Those that did not buy had a similar refrain: they were not comfortable enough in their knowledge of art to confidently make a purchase.

Yet, all of these folks had some sort of art on their walls at home. Perhaps not art, per se; what was on their walls might better be described as posters. Many were interested in collecting original art; they just didn't know how to begin. The purpose of this article is to offer a primer on how to begin to collect original art. We will accomplish three things: 1. You will understand the relationship between the artist, the medium and the price; 2. You will have an understanding of your current art collection, and how to go to the next level; 3. You will know how to safely and confidently expand your art collection.

To collect art confidently, you must know four things: 1. Who is the artist? 2. Is the work original? 3. How rare is the artwork? 4. Where did the work come from? Let us examine each of these points in greater detail.

The price of an artwork is impacted the most by the name of the artist. For the sake of this discussion, think of the artist as if he was a branded commercial product. Consider cars and watches. Which car is the more desirable brand; Mercedes or Ford? Which watch is more desirable, Rolex or Timex? What makes Mercedes and Rolex more desirable? The materials and workmanship that goes into the product. What makes an artist the best? Artistic skill, content, and creativity. Some artists are Rolex, and some are Timex. Who determines which artist is a Rolex and which is a Timex? Usually the critics decide. If the critics make a fuss about a particular artist, the buzz creates demand for the artists work. The physical constraints of producing a lot of one-of-a-kind artwork keeps the supply low. When demand outstrips supply, prices go up. You will pay more for a Picasso than you will for a similar LeKinff, because the supply of available Picassos is low, and his name is the stronger artistic brand.

Let us next consider what constitutes original artwork. The popular misconception is that the term original means one-of-a-kind, or the first one produced. That's not the case. The root of the word original is origin. Original artwork is any artwork that originates with the artist. The artwork does not have to be the only copy to be original; the term original applies to art prints as well as paintings. If an artist creates a limited edition print set, the set still originates with the artist and every print in the set is original artwork. When Marcel Mouly created a set of lithographs, his artistic intention was to create a lithographic set. Each color was laid onto a separate stone, and colors were laid from the stone onto the paper one color at a time. When he was finished, the stones were destroyed, and the paper prints remained. Mouly created the set. The set originated with Mouly. Each print in the set is original artwork.

The third factor in determining the price of an artwork is rarity. As mentioned above, supply and demand play a big role in determining the selling price of an artwork. The more rare a type of artwork is, the more expensive it will be. For purposes of collecting, there are four established levels of collectibles, based on the rarity of the type of artwork. I will designate these levels A, B, C, and D.

The A level of collectibles is one-of-a-kind artwork. Paintings, drawings, etc. that are one of a kind will bring the highest price relative to the particular artist. A painting by Picasso sells for more than a limited edition print by Picasso. A drawing by Norman Rockwell will sell for more than a Norman Rockwell print of the same drawing.

The B level of collectibles is relatively new to the art scene: embellished works. An embellished work starts out as a limited edition print, and then the artist over paints the print. Each over paint is slightly different, so the each is considered to be an original variation. Embellished works generally look like a painting and feel like a painting, but sell for considerably less than a one-of-a-kind painting.

The C level of collecting is signed and numbered graphic works, commonly called limited edition art prints. Most folks who are new to art collecting will begin with limited edition art prints. Art prints have been around for hundreds of years. The Japanese were producing art print woodcuts in the eleventh century, and the German Albrecht Durer's wood cuts and Rembrandt's etchings are unrivaled hundreds of years after the works were created. You will find five types of collectible art prints on the market today: woodcuts, etchings, lithographs, serigraphs,and giclees. It is outside of the scope of this article to discuss the techniques involved in each type of print. Suffice it to say that these print techniques are taught in major art schools all over the world and are accepted as original works of art.

The D level of collecting is open edition art, commonly called poster art. Poster art is created in print shops, not art studios. The posters are printed until no one buys them anymore. They usually sell for a few dollars unframed. Such prints are commonly found in department stores and furniture stores.

The fourth consideration in valuing art is provenance, or proof that the artwork is genuine. These days, it is easy to use technology to duplicate artwork on a large scale. It's tough to tell the fakes from the real thing. So, if you are buying original artwork it is important to know where it came from. Is there a bill of sale? Was it purchased from the artist himself, or from a reputable art dealer? Art passes from generation to generation. The artworks documentation should follow the artwork, so that it will be easy to establish that it is genuine. Without reliable documentation that proves the work is original, the value plummets. Provenance is to artwork what pedigree is to a dog. You expect to pay more for a dog with pedigree papers, and you should expect to pay more for artwork with provenance.

With the above information, you should be able to walk into an art gallery and get a sense of the relative value of the artworks. You know that one-of-a-kind works will be more expensive than prints, but that prints are still original artwork. You know that artists with the greatest demand bring the highest prices. A print by a famous artist may cost more than a painting by a less famous artist. It's all relative. Above all, your guiding consideration should be that you like to look at it.

Nov 6, 2009

Where To Find A Good Moving Company

The Federal Motor Carrier Safety Administration estimates that only about a third of all internet moving brokers meet federal registration requirements. That means that two out of three moving companies are operating outside the rules. Yet, most people start their search for a mover online. Yes, there are many reputable companies to be found online. The company you hire will most assuredly have a website. But, find your mover the old fashioned way: ask for referrals.

To find a good referral, start in your own neighborhood. Has anyone moved in lately? Call them or knock on their door; they will likely have a story to tell about their move. Call a local Realtor. They hear all the stories about who is good and who to stay away from. Many large real estate companies will have a Relocation Department that contracts with corporations to handle the real estate end of relocating employees. These Relocation Departments know who the good movers are. How about friends and family? Even if they have not moved recently, they may know someone who has.

If you cannot get a referral for a mover, my recommendation is to stick with one of the top six nationwide moving companies. I suggest this not because they are better than the smaller companies; I suggest this because they have claims systems and insurance in place in case something goes wrong. I found these companies to be efficient in the way their claims were handled. Having said that, be aware that since I was involved, that means there was damage to be assessed. It is important to know that if there is damage, you will not be swept under the rug. The top seven companies are (in no particular order) United Van Lines, Mayflower, Allied, North American, Global Van Lines, and Graebel. Most national moving companies work through a network of locally owned affiliates. The quality and efficiency of the local affiliates will vary. Claims will be centralized.

Remember, a well known name is no guarantee of performance. The bottom line is this: it does not matter what the name on the truck is. What matters is the quality of the people who show up to do the work and the efficiency and reliability of the system used to get your goods moved. The sad fact is, in America no one wants to be a mover. It is hard work and it does not pay very well. Consequently, movers do not consider the job a career. It is considered temporary employment until they find something better. Usually the only career professional involved in your move will be the driver. It is rare to find packers and movers that have uninterrupted years of service. Do not be fooled by a salesman who says that their people are well trained professionals. In the busy season, your movers will likely be part time or temporary workers who are long on attitude and short on skill.

Choose at least three companies from which to get an estimate, but do not make your decision yet. In a future article, I will show you how to check out the companies safety record and check the reliability of their price estimate.

Nov 5, 2009

How To Estimate The Weight Of Your Household Goods For Moving

Moving companies are often wrong when it comes to estimating the weight and value of your household goods shipment. Some estimators do a pretty good job, but there is such high turnover in the industry that you never know how experienced your estimator really is. If you make your contract decision based on price, you may be in for a big surprise when the driver hands you the final bill at your destination.

There are a few simple steps you can take to estimate the weight on your own. Following these steps will keep you in charge of the process and protect your rights in case you need to make a claim.

You want to start by sorting and inventorying your belongings. If this sounds like more work than you want to do, there are companies you can hire to inventory and value the contents of your home. No matter who does your inventory, you need to have an inventory done. Without it, you are at a disadvantage from the start. With it, you have a foundational document that can be used throughout your dealings with the moving companies.

Start by separating the valuable stuff from the ordinary stuff, the heavy stuff from the light stuff, and eliminate anything that the movers won't be moving. As you go, simply list what you have. The list will help you determine the weight and value of your shipment. The best way to proceed is to start upstairs and work your way down, or start down then up if you prefer. Move around each room in a clockwise direction and write down everything you see. Write down items on the floor first, and then items on the wall, and then items in cabinets. Stay consistent from room to room so you don't miss anything. Collections can be listed as collections, rather than individual pieces. When you are done with the house, inventory the shed and the garage in the same fashion.

You probably won't take everything in your house. Items that won't be moved fall into two categories: things you can't take, and things you won't want to take. The things you can't take include anything that could explode, start a fire, rot, or give off toxic fumes. Such items cannot be transported or placed into storage. These are the items that are most troublesome to deal with. You can't just throw them in the trash. Call your county department of the environment; they will tell you how to dispose of them. Have a plan for getting rid of these items. You don't want to leave a bunch of hazardous waste in your house. Realtors frown on that. Makes the house harder to sell. Items you don't want to take should be donated to charity, sold, or consigned to auction. Have the items picked up before you get your estimates. If it's not in the house, it won't contribute to an estimating mistake.

Once you know what you are going to move, there are three approaches to estimating the weight of your shipment. The first way is to take an educated guess. Add up the individual weights of the items on your inventory. For reference, I have provided a downloadable table of household weights on my website, . If you are moving an item that is not on my list, find an item of similar heft and use the weight of that item. Remember, you are looking for a god estimate, not an exact number. Add up all the individual items for your total weight.

The second way to estimate the weight of your shipment is to take a wild guess. I'm not kidding; this method actually works. I'm told that the average shipment of household goods will weigh about 40 pounds per item. Remember that some items will be boxes of small goods. Total the number of items on your inventory (including boxes) and multiply by 40. If you have 150 items on your inventory, your weight will be somewhere in the 6,000 pound range. Not impressed with this method? That's why I call it a wild guess. Still, if your wild guess came in at 6,000 pounds and your estimator gave you an estimate of 3,000 pounds, wouldn't you want to know why?

The third way is illegal, so use it at your own risk. There are household goods weight calculators online. Most of them are on government owned websites, military and GSA. They are supposed to be for authorized users. If you decide to use one, be sure to read the warnings and use good judgment. I only include this information here because I know that some of you will look online for your weights.

Beware if your estimator wants to give you an estimate based on cubic feet; i.e., how much space your shipment will take up in the truck. This is a useless number for billing purposes, since interstate carriers have to charge you based on weight and distance. Figuring cubic feet is useful, however, in determining whether you will be sharing a truck with another shipper, get a whole truck to yourself, or need two trucks. The chart on my website also lists the sizes of household items in cubic feet.

With your inventory done and your weight figured, the next thing you need to know is how to determine the value of your shipment for insurance purposes. Those considerations will be the subject of my next post.

Nov 4, 2009

You Can Pay Attention Or Pay A Higher Price But Either Way You'll Pay

About five years ago, I was asked to inspect a moving damage claim on Maryland's Eastern Shore. The movers' truck had flipped over on an exit ramp and rolled down a hill. When I arrived at the customer's home to inspect the damage, I found the worst mess I've ever seen on a moving claim. I found the metal sleeper sofa frame twisted and unusable, and wooden furniture crushed and broken. The most heart-breaking loss for the customer was the loss of her porcelain collection. She had packed her Hummels, Lladros and Limoges into one box, and when opened, there was nothing left but crushed and broken glass. The box was simply labeled fragile; there was no list of what was in the box. She could not remember, specifically, all the items in the box. She had no proof of ownership: no receipts, no photographs. Her claim was denied, on several counts.

The above story has lots of implications, but for now I want to use it to illustrate just one point: before you move, you have to know what you have. The moving company will charge you according to the weight of your shipment, the value of your shipment, the distance shipped, and what extra services you require. You will pay for insurance based on the value of your shipment. If you don't know what your household goods are worth and what they weigh, how will you know if you are being charged correctly?

Moving companies want your business. Are you likely to give your business to the mover with the highest price (all other things being equal)? Of course not. The salesman knows this, so he will quote you a competitive price. In the moving business, competitive price usually means fictional price. One of the most common complaints against moving companies is that the moving company will quote you a price prior to pickup, and double or triple the price upon delivery. Here's what actually happens in most of these cases: 1. The salesman underestimates the weight (due to lack of training, laziness,or greed)and prices his estimate accordingly; 2. The customer hasn't a clue if the salesman's weight guess is right or not and does not challenge the weight; 3. The customer isn't sure what their stuff is worth, so they take an uninformed guess; 4. The shipment is officially weighed, and the customer is not present at the weighing and does not request a copy of the weight ticket; 5. At delivery, the customer is presented with a bill based on the actual weight of the shipment and the published tariff of the mover (which is how the mover is supposed to charge) and the bill is much higher than the estimate; 6. The customer claims they are being cheated; 7. There is damage to the furniture, and the valuation is not sufficient to pay for the repairs.

What actually happened here? There are two possibilities: 1. The customer was not paying attention. The salesman was wrong, and the customer didn't know it. The customer did not know the weight or value of the shipment (this is simple to guess, if you know how). They did not know their rights in regard to confirming or challenging the charges. 2. The customer was not paying attention. The movers knew this, and they were crooks and had every intention of scamming the customer. Either way, the customer was not paying attention.

Before you call for estimates, you have to have a way to determine if you are being told the truth and being treated fairly. This is not the movers responsibility, it is yours. The first step in preserving your rights is to know what you have, what it's worth, and how much it weighs. On my website ( I make available a chart that will give you the weights and cubic footage of common household items. I also have an estate/tag sale pricing guide, which will give you approximate values for your furniture, appliances, and decor.

When you move, you can pay attention, or you can pay a higher price. But, either way you will pay.

Oct 29, 2009

Value Is A Moving Target

As an appraiser, the question I hear most often is: what's it worth? I don't just hear the question at work; I expect to get the question there. I mean I hear it at the mall, in line at the grocery store, at parties, and sitting in the doctors office. What is my antique furniture worth? What's the value of my art? What can I get for my collectibles? In a social setting, I find the question annoying; I feel a bit like the doctor who, when at a party, is always asked for a free diagnosis. To many, I'm sure my answer is equally annoying. I always tell them that it depends.

You see, value is a moving target; it changes constantly. You know from shopping in retail stores that prices are subject to change from store to store and season to season, but when it comes to antiques and collectibles, people tend to think that an objects appraised value is like money in the bank. Not so. The value of an object is dependent on the market demand for the object, the supply of the object, the condition of the object, the usefulness and/or significance of the object, and the circumstances under which the object will be sold. No matter how beautifully made something is, if it's too big, the wrong color, is commonly available, or must be sold in a hurry, the value of the object drops precipitously. Ultimately, the value of an object is what someone is willing to pay for it. What one is willing to pay will vary with how badly or how soon they need it. When would you pay the most for a household generator: when the weather is calm, or when a hurricane is approaching? I'm sure you get the picture. My intent in this article is to give you a broad view of the key valuation aspects involved in an appraisal. In future articles, I will discuss each aspect in detail.

When approaching a personal property appraisal, there are four valuation aspects that an appraiser will consider. First, a description of the object itself, discussing in detail its condition, utility, age, and quality. Secondly, the object must be placed in its historical context. Is the object genuine, or a fake? What is the style? Are the materials appropriate for the time period? Thirdly, the intent of the appraisal must be established. Value cannot be assigned until the purpose of the valuation is known and stated. A value for insurance purposes will be higher than a liquidation value. A fair market value will differ from cash value. Estate value will be lower than divorce value. Lastly, the market in which the object is located or sold will affect the value. Where there are a lot of potential bidders for an object, the value increases. Farm tractors sell better in farm country than in the city, because there aren't any farmers in the city. Consequently, a tractor will likely be worth more in Hillsville, VA than in Los Angeles, CA. This market area aspect of valuation often escapes people who use blue books and price guides to value their objects. If no one in your market area will pay the price listed in the blue book, then the blue book price is wrong for your market area and does not correctly represent the objects value.

Finally, know that appraisals for estate purposes, insurance, divorce and other reasons are all time-sensitive. The value provided is for right then, right there. Don't think that the value assigned will be good next year or the year after, because value is a moving target.

Oct 28, 2009

Appraisal vs. Opinion of Value

On my last Alaska cruise as an art auctioneer, my friend Tamara, the ships' Port Shopping Ambassador, related the following story: a passenger purchased an item of jewelery from a store in Skagway for around $10,000. The following day, the passenger got a serious case of buyers remorse, and sought to return the jewelery on the basis that the item was misrepresented and overpriced. To prove the item was overpriced, she took the item to a second jewelery shop to ask the shopkeeper to appraise the item. The appraisal offered was nowhere near what she paid for the item. In fact, the second shopkeeper told her that she had overpaid, and that she should return the item and then come back, because he could offer her a higher quality item at a lower price.

I'm sure that this situation is as transparent to you as it was to me: the second shopkeeper was trying to make a sale at the expense of the first shopkeeper. That this sales tactic could work is rooted in the passengers ignorance of the difference between an appraisal and an opinion of value. The ignorance of this difference has cost clients of mine thousands of dollars in lost insurance claims and missed opportunities. Knowing the difference between an appraisal and an opinion of value will be to your advantage.

An opinion of value is an opinion offered on the basis of experience and expertise. Such opinions may or may not be valid, depending on the qualifications and ethics of the person offering the opinion. The persons offering such opinions are not required to be independent, impartial or objective. They can, and often do, have conflicts of interest and hidden agendas. An opinion of value has no requirements for documentation or evidence. Those offering an opinion of value are not held to the same legal and ethical requirements as a certified appraiser. Let's say that you took a Picasso etching to an art dealer who gave you his opinion of its value, called the opinion an appraisal, and then offered to buy the painting for the appraised price. The dealer would have offered you no evidence to back up his claim of value, and clearly had a conflict of interest. His opinion of value is worthless.

The value offered in an appraisal, on the other hand, has been researched and evidence is offered to support the value claimed. Most often, evidence is offered in the form of comparable sales; that is, what items like yours have actually sold for recently in your market. In addition, a proper appraisal follows the format of the Uniform Standards of Professional Appraisal Practice (USPAP) which has been authorized by Congress as the source of appraisal standards and appraiser qualifications. USPAP is generally recognized by the courts and by the IRS. A USPAP-compliant appraisal clearly establishes the details of the appraisal, the appraiser, the intent of the report, assumptions, limiting conditions, and all evidence supporting the conclusion. When done, the appraiser must sign and certify the report. Such a report will stand up to legal and IRS scrutiny and the value offered can be trusted.

Now that I've established what an appraisal is and isn't, let me throw a wrench in the works. If you called five appraisers to appraise the same item, you may get five different appraised values for the item. How can that be? An appraiser must make certain assumptions and adjustments in arriving at the value of your item. Unless sales evidence can be found for an item exactly like yours, adjustments will have to be made to compensate for differences in age and condition. Making adjustments is more art than science, and ultimately depends on the skill and experience of the appraiser. Also, the intent of an appraisal will have a bearing on the value. Appraisals for insurance replacement, estate liquidation, fair market value and cash value will all yield different numbers. If the value of your tangible personal property is important for estate, tax, divorce, or other legal consideration, please don't rely on an opinion of value to make your claim. Call a certified personal property appraiser.

Oct 23, 2009

16 Ways To Turn Estate Personal Property Into Cash

O.K.; you've been appointed Executor of the Estate. You don't know if this is a blessing or a curse. There is a stack of bills to pay: utilities, mortgage, funeral expenses. Heirs and relatives are clamoring for "their share". Before the bills can be paid, you have to collect all the money that is due the deceased, and liquidate all the possessions that won't be distributed to heirs. What's the best way to liquidate the furniture? The clothes? Kitchenware? The lawnmower? The car?

In this article, I'll discuss 16 ways that an Estate Executor can turn Estate Personal Property into cash so that the bills can be paid and the Estate settled. They are:

1. Estate (tag) sale: These sales are run by tag sale companies, and are done inside the deceased's home. For a percentage of the proceeds, a tag sale company will come in and sort, tag, price and display everything in the home. From the grand piano all the way down to a half can of Ajax, everything gets a tag and a price. The sale will be advertised and promoted. On the day of the sale, buyers will take a number and be admitted into the house a few at a time. When one buyer leaves, another is admitted. The tag sale company will handle all the money and provide an accounting of what was sold, and for how much. they will also handle price negotiations with the buyers. It is rare that everything in the house is sold at a tag sale. There will be a fair amount of stuff left over to dispose of.

2. "Dealer Only" tag sale: These are estate sales that are promoted as a private sale to dealers in antiques, jewelry, books, and collectibles. The sale is run by a tag sale company and is conducted in the decedent's home.

3. On-site auction: At an on-site auction, everything in the house is taken outside in the yard to be displayed and sold. Often, the auction company will provide tents, seating, and porta-potties for the crowd. The auction company will handle all the advertising and promotion. The auction "block" will be set up and everything will be sold to the highest bidder. There is seldom anything left after an auction.

4. Gallery auction: If your estate is to be sold at an auction gallery, everything in the house that is saleable will be picked up and moved to the gallery, where it will be sold to the highest bidder. Auction galleries will seldom take "run-of-the-mill" consumer goods that could be purchased for pocket change at a thrift store. Galleries are interested in high-end products.

5. Online auction (ebay, etc): Online auctions are good for small items that are easy to ship, or for large, expensive items (like boats, cars, or RV's) that buyers are willing to travel to pick up. You can list the items yourself or, for a fee, hire a company to photograph, list, sell, pack, and ship your items. You can find a list of "third party sellers" on ebay.

6. is an online service that is affiliated with ebay. New and used merchandise is offered for sale. Unlike ebay, there is no bidding; items are offered at a fixed price and can be purchased directly online. Nine categories of merchandise are offered for sale: books, music, movies, video games, software, electronics, sporting goods, trading cards, and toys.

7. If you have a collection of books to sell, nothing beats Amazon. You can list your books for free, amazons commissions are reasonable, and they will deposit the money right into your checking account.

8. Retailer sale: Items that are commonly purchased used (cars, pianos, guns, musical instruments) are often purchased by retailers that sell the same items new. You can call the dealer directly, tell him what you've got, and he'll usually make you an offer. Dealers like to have some used items around for customers that don't want to buy new.

9. Consign to broker: Boats and boat trailers are often sold by yacht & boat brokers. You can find them in the yellow pages under "yacht brokers".

10. Newspaper classified: You can list anything for sale in the newspaper classifieds. The downside is, newspaper classified ads are expensive, and someone has to be available to answer the phone and show the property offered for sale.

11. Craigslist: Craigslist is a popular online advertising site. You can list your items for free at

12. Antique stores: Antique stores often buy entire estates. If you are looking for a fast sale with no fuss, this may be your best option. The downside is that this method brings only a fraction of the money that other methods bring.

13. Used furniture and appliance stores: Used furniture stores will often buy your "non-antique" furniture.

14. Consignment stores: If you must get a certain price for your property and are not in a hurry, consignment stores might be the way to go. Most consignment stores will continue to reduce an items price until it sells. My opinion is that it takes too long to sell items in a consignment store, and the prices received are no better that at an auction or tag sale.

15. Wholesale distributors: Wholesale distributors don't usually purchase used property, but they can sometimes tell you who does. If you have used medical equipment, stair lifts, hospital beds or other hard-to-sell items, call the manufacturer or distributor and they can usually point you in the right direction.

16. Charities: If you believe that "a penny saved is a penny earned", then donating property to charity is a way to increase the "bottom line" of your estate liquidation. Just like on your personal taxes, estate property donated to charity is a tax deduction and will net you more cash (check with your tax advisor). Be sure to use a recognized charity that will give you a receipt.

Once the property is liquidated, it's time to clean up the house to prepare it for sale. My next post will discuss 7 ways to get the real estate sold.

Oct 22, 2009

How To Inventory & Value Estate Personal Property

There's an old saying that goes "What's the best way to eat an elephant? One bite at a time!"

Personal property is the "elephant" of an estate. It's the responsibility that can take up most of your time, and it provides the estate with the least amount of money for the effort involved. But, dealing with the personal property cannot be avoided. The property must be inventoried, valued, distributed, or sold. Let's start our analysis by looking at what property we have (inventory); then we will determine what it is worth (valuation). In a future post, we will determine what to do with it (distribution/sale).

When you go to the courthouse, the clerk will provide you with the form you will need to fill out for the inventory. The form will ask you to provide general categories and a value for each category you have listed. For example, you would list: "furniture, $1500; office equipment, $300, etc.. You won't have to list the items separately, such as "sofa, $100; chair, $5; typewriter, $25. I suggest that you do keep a list of the individual items, though. Although you won't have to go into a lot of detail for the court, you will likely want a more detailed inventory for yourself. You'll want this for two reasons: to track the sale of estate property, and to protect yourself against claims of heirs and/or creditors.

You don't have to get real fancy with with the inventory; pencil and paper will do. If you are so inclined, there are "home inventory" record books available at office supply stores, or you can purchase software online. There are also companies that specialize in taking home inventories.

You'll need a helper. One person sorts and counts while the other writes. Start inside the house, and work your way from the top of the house to the bottom (or vice-versa). Go room to room with a consistent pattern so that you don't miss anything: always clockwise or counter-clockwise around the room. Write down what's on the walls as well, not just what's on the floor. For "small goods", write down identifiable groups of items such as "200 hardcover books, 100 paperback books, 42 nick-knacks, etc.. On your list, put a star next to any item that you think may be valuable. If the nick-knacks are Hummels or Lladros, the vase is Heisey and the books are first editions, they are valuable items. When you are finished, follow the same procedure for the outbuildings: the garage, shed, workshop, or whatever. If there is a rented self-storage unit, vacation home, recreational vehicle or boat, they will need to be inventoried as well.

When you file the inventory at the courthouse, you'll need to state a value for the personal property. For run-of-the-mill household items, a good resource for determining the value is the software program It's Deductible that comes bundled with the income tax program Turbo Tax. It's Deductible can also be purchased separately. The software lists the "thrift shop" value for most household items, and it's easy to use.

For the items that you have identified as being valuable, It's Deductible won't work. There are several ways to determine the value of single items or collections. A good place to start is ebay ( To use ebay to help set your values, you will need to be a registered user. Registering for ebay is free; just follow the instructions when you get to the website. Once registered, type in the item you are researching, and ebay will search for the item. When the search results come up, scroll down and look on the left side of the page to where it says "Search Options", click on "completed listings", then scroll down further and click on "show items". The search results displayed will be for completed auctions, not for auctions in progress. The prices listed in green are items that actually sold; the prices in red are for items that did not sell. If you find your item listed, and the price is green, you have a good value. Compare the details of the item you found on ebay with the details of the item you have. Use the closest match as your value.

If you are unable to find your item listed on ebay, it's time to go to the library or bookstore. There you will find an assortment of price guides for every sort of antique or collectible. You will also find "blue books" for automobiles and equipment.

If you have lots of items and no time to research, then it's time to call in an expert. In your local phone book you will find jewelers, antique dealers, auctioneers, appraisers, and other professionals who will tell you what the property is worth. What they will offer you is an opinion of value, not an appraisal. An appraisal is based on actual sales data, not an opinion. I'll cover appraisals below; for now, just be aware that there is a difference. For probate valuation purposes, the value placed must be the fair market value at the time of the decedents death. This is the value you should ask your expert to provide.

In my home state of Virginia, individual items or collections that are valued over $500 must have an appraisal. Personal property appraisers are not licensed like real estate appraisers, but the content of their reports is regulated. For a personal property appraisal to be valid and accepted for tax purposes, it must be performed by a qualified expert and follow the federal guidelines of the Uniform Standards of Professional Appraisal Practice (USPAP). Most real estate appraisers do not appraise personal property. You can find a personal property appraiser online by checking the websites of the Certified Appraisers Guild of America, the National Association of Auctioneers, or the American Society of Appraisers.

Estate Executors will find that the inventory and valuation of estate personal property is their most time-consuming task, but there are resources available to help.

Oct 21, 2009

An Estate Executors' To-Do List

I just got off the phone with Nancy. She is feeling a bit overwhelmed. Her mother has just died, and Nancy has been appointed executor of her mothers' estate. Nancy has a full time job and a family of her own. Her mom lives in a different state. Nancy doesn't see how she will have time to be an executor, but her sense of loyalty to her mother and responsibility to her family compels her to "step up to the plate" and get the job done.

Nancy is in for some tough times. While still dealing with the emotional loss of her mother, she will have to empty her mothers house of forty-five years of accumulated memories. Everything in the house will have to be inventoried and values assigned. Her mothers doll collection and her fathers coin collection will have to be appraised. The inventory and appraisals will have to be submitted to the Probate Court. Property will have to be distributed to the heirs according to the Will. Then, the entire contents of the house, the furniture, appliances, bedding, pots & pans, clothing, car, even the lawn tools will have to be sold so that the house can be readied for sale. When both the titled and non-titled property are liquidated, the debts and taxes will have to be paid to settle the estate.

My purpose here is to help executors like Nancy understand the "big picture" of what must be done to settle an estate. Keep in mind that I am not a lawyer or an accountant, and I am not offering legal or accounting advice. The information I am offering is based on my experience as an Estate Property Specialist. If you have questions or concerns, my recommendation is to seek legal advice. A good Estate Attorney is an asset.

Let's start with an overview of an Executors' responsibilities. As executor, your first duty is to initiate probate, which is the formal process of "proving" the Will and confirming your appointment as executor. The Clerk of your county Probate Court can provide you with the forms that are appropriate for your county. My experience with probate court clerks is that they are very helpful and responsive to your requests. Many of the forms you will need can be downloaded over the internet at your state or county website.

The details and deadlines in settling an estate will vary from state to state. In general, there are 16 items that will be on your "to-do" list. They are: 1. Locate the will 2. Apply to appear before the Probate Court 3. Notify the beneficiaries named in the Will 4. Determine the debts of the deceased 5. Arrange for publication of "Notice to Creditors" and mail a notice to each known creditor 6. Send notices of the persons death to post office, utilities, banks, and credit card companies 7. Collect any money owed to the deceased 8. Inventory the assets, assign values, and have appraisals done if necessary 9. Check with the deceased's employer for unpaid salary, insurance, and other employee benefits. 10. file for Social Security, civil service or veterans benefits 11. File for life insurance and other benefits 12. File federal and state tax returns 13. Pay valid claims against the estate 14. Distribute assets and obtain receipts from beneficiaries 15. File papers to finalize the estate 16. Obtain a lawyer or accountant, if necessary.

Do you need a lawyer or accountant? Technically, no. There is no law in place that says you must have an attorney, or that estate taxes must be done by an accountant. But, remember this: taxes and probate can be complicated issues. Mistakes will delay the closure of the estate and the distribution of inheritances. A good lawyer and/or accountant is an asset. Legal and accounting fees are paid by the estate. My advice is to shop around for an experienced probate attorney. Fees vary widely, so be sure to find out what the estate will be charged for legal services before making a commitment.

I'll give you the same advice I gave Nancy: Stay organized, and you will be able to get through this. Find out what your deadlines are, and make a check list with "to be done by" dates. Prioritize your tasks, and dig in. Having a checklist will help you maintain control and minimize the effect on your personal life.

Oct 15, 2009

Who Gets Grandma's Yellow Pie Plate?

Your teenage grandkids probably don't want to inherit the collectibles you now cherish. but don't despair; the value one places on family heirlooms changes as one matures. To a 15 year old, grandpa's journal is just a dust collector. When that 15 year old reaches 45, the same journal becomes a treasure of family history.
What treasures are stored in your home that you want to pass on to members of your family? Will your family members cherish and enjoy them as much as you do?
In my business as an Estate Property Specialist, I have discovered that deciding who gets Grandpa's baseball glove or Grandma's cookie cutters can be among the most challenging decisions a family can make. Although these items are "just stuff", the personal belongings of a loved one can trigger memories and feelings about the person that once owned the item. I once watched two siblings resort to shouting to see who would get mom's favorite Christmas tree ornament. I have often been told by Estate Attorneys that it is frequently the personal property, not the titled property that causes the most problems when settling an estate.
There are no magic formulas available for deciding "who gets what", but research has identified six steps in the process. They are:
  1. Understand that the gifting of your personal property may have emotional consequences for your family.
  2. Determine what you want to accomplish. Is it your goal to maintain privacy? To have an "equal and fair" distribution? To preserve and care for the item given?
  3. Decide what is "fair" in the context of your family.
  4. Understand that belongings have different meanings for different individuals.
  5. Consider distribution options and consequences.
  6. Agree to manage conflicts if they arise.
Most of all, you have to "decide to decide". After all is said and done, the property is yours and you may do with it as you please. Don't let your family fight over your possessions. Be proactive; discuss the distribution of your property wit your family members, and make a list so that your wishes will be known. My mother spent the last decade of her life discussing with her five children "who would get what". She kept a list, and put a sticker on the bottom of each item so there would be no question as to what her wishes were. Although there was one item that I wanted that went to a sibling, I was comforted to know that mom's wishes were fulfilled.

For those of you with complex family issues, help is available. The University of Minnesota Extension Service has a workbook entitled "Who Gets Grandma's Yellow Pie Plate?" that is available by calling the Extension Service at 1-800-876-8636. Also, I teach the "Yellow Pie Plate" workshop, and would be pleased to present it at no charge to your local club, church group, or organization. For information, please visit my website at

Downsizing Mom

I told my wife that the url for my new blog was going to be "". She grimaced and I got "the look". "Downsizing Mom"? she said; "sounds like a weight loss blog".

She's right, in a sense. Throughout our lives, we tend to accumulate "stuff". Clothes, furniture, appliances, vehicles. We surround ourselves with the things we love. Our "stuff" reflects who we are. As the years go by, "stuff" accumulates. We become "overweight" with our "stuff".

Eventually, we have to get rid of the bulk of what we have accumulated, whether we want to or not. A spouse dies. We grow old and cannot take care of our home. An injury makes us less mobile. We know that the time has come to make a move that will improve our quality of life. At that point, the "stuff" we have accumulated becomes a burden. We are faced with decisions about what to keep and what to get rid of. The very thought of packing up a lifetime of memories can be so overwhelming that we often become paralyzed and choose to "stay right where we are". If we are lucky, we get to make the transfer decisions ourselves. If not, the decisions will pass to our children or executor.

Downsizing and/or liquidating an estate is emotionally draining, but it does not have to be a traumatic experience. The keys to success are advance planning and an organized approach. With that in mind, the focus of my future posts will be threefold:
  1. Pre-planning for personal property transfers
  2. How to downsize effectively
  3. Estate Liquidation
Family dynamics will change from family to family. There is no "one size fits all" solution for estate transfers. As we move forward, I hope to hear from some of you. What challenges have you faced in liquidating a loved ones estate? Have you found effective ways to deal with the anxiety? What professionals have you found to be helpful or troublesome?

Somewhere, there is a family whose challenges are just like yours. If solutions can be shared through this blog, we will all benefit.