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A Guide to Online Appraisals (cont.)

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“I have a number of elderly clients,” Wilcox says. “They’re homebound or they can’t get out, so they have their nieces and nephews bring over their cameras and their smartphones, and they can go through their entire home and take incredibly clear video.”

We’re uneasy with the notion of our elderly parents shooting video of their belongings and sending the footage to a website with the hope that an appraiser will tell them that they have a valuable antique. Although no hard data exist, every expert whom we interviewed for this article tells us that it’s common to hear of complaints about unscrupulous online appraisers. These appraisers send back inflated values to encourage consumers to appraise more items or send back lowball estimates and offer to connect consumers with dealers to buy their items. These problems aren’t limited to online appraisers; they also are common with in-person appraisers, our experts say. Unfortunately, the appraisal industry is unregulated, and after a consumer places his/her trust in an appraiser, the consumer doesn’t have any recourse (outside of filing a complaint with an attorney general or an appraisal organization) if something goes wrong, says John Breyault of National Consumers League, which tracks consumer fraud. Most consumers don’t know the value of the items that they’re having appraised, so they don’t even realize that they’re being ripped off, says Ina Steiner, who is the publisher of ECommerceBytes and has written about Internet commerce since 1999.

We decided to take a closer look at online appraisers to judge their thoroughness and trustworthiness. We sent digital images of four family heirlooms of unknown value to four online appraisers. (See “How Did They Fare?”)

One online appraiser told us that our Croatian tablecloth was woven at some point between 1900 and 1910, but another online appraiser told us that it dated from sometime between 1920 and 1950. Another online appraiser said our two lion sculptures were worth between $700 and $900 as a set, but the same online appraiser also admitted that she couldn’t deduce from our images whether our sculptures were made out of bronze or (less expensive) plaster. All of the sites gave us estimates of the fair-market value of our items, but they conceded that they couldn’t guarantee their accuracy. (An in-person appraiser, however, will figure out the accurate value of an item based on what you want to do with the item: divide up an estate, sell at auction, etc.) In short, we ended up with some rough ideas about the possible value of our items but no concrete information. That doesn’t surprise Steiner.

“Online appraisals can be a good starting point for educational purposes, but I wouldn’t say that relying on an online appraisal is a good idea for anybody,” she says.

Richard Johnston, who is the founder of ValueThisNow.com, which uses a network of 106 appraisers, tells us that most of the items that his network appraises are worth $1,500 or less. If you have a high-priced item that demands a close inspection, you’re best-suited to get an in-person appraisal, he says. We didn’t see that caveat posted anywhere on Value
ThisNow.com, and we aren’t certain whether our items are “high priced.”

If you want to use an online appraisal for something more than a starting point in your research, you should be aware that online appraisals won’t hold up in court, with Internal Revenue Service or with most insurance adjusters. On most appraisal websites, you’ll find these caveats mentioned only in the fine print. On other websites, you won’t find any mention of them.

PROBLEMS ARISE. As we said, no mandatory regulations exist for personal-property appraisers, either in person or online. Personal-property appraisers (in person and online) can choose to pay dues and join an appraisal organization to attach to their name as a credential. The three largest organizations—American Society of Appraisers (ASA), Appraiser Association of America (AAA), International Society of Appraisers (ISA)—are the only entities that police the appraisal industry to some degree to ensure that their members provide credible valuations. All three organizations mandate that their appraisers abide by Uniform Standards of Professional Appraisal Practice (USPAP) guidelines, which is a framework of rules for appraisers to follow. If a member violates USPAP guidelines, the organization might revoke his/her credential.

We never put much stock in self-regulation, but, short of regulation, your best bet is to use only an appraiser who belongs to one of these organizations. Unfortunately, only about 25 percent of appraisers join at least one organization, estimates Dave Maloney, who has appraised personal property for 30 years.

If you claim a deduction of more than $5,000 for the donation of related items, such as rare books, on your income-tax form, then you can’t use an online appraiser. IRS mandates that the items be appraised in person by a member of ASA, AAP or ISA.

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