We are often approached for advice on appraising Oriental andarea rugs. In our next installment on this topic we will address “identification and appraisal”. Read on to learn more about “valuation and appraisal” in which we address commonly asked questions.
HOW CAN I FIND OUT WHAT MY RUG IS AND WHAT IT IS WORTH?
We offer informal verbal appraisals at no charge. If your rug is at our facility, we will provide an opinion of origin, age, and value. If you would like to send photos we will do our best to provide as much information as we can from the images sent.
CAN I HAVE A FORMAL WRITTEN APPRAISAL PREPARED?
Yes, we do that too. Written appraisals include photographs, a technical description, age, origin, condition assessment, and an opinion of value. Our written appraisals provide a `replacement value’, the cost to acquire a similar rug in similar condition. Values are determined by reviewing wholesale and retail market pricing, as well as auction results when applicable.
ARE THERE DIFFERENT TYPES OF VALUATIONS?
Yes. The amount you can sell a rug for is often different than what it could cost to buy from a retailer. The following definitions help explain different types of values:
- Salvage Value: This is the value an appraiser or insurance adjuster may assign a rug that has been damaged beyond repair, or that cannot be returned successfully to a pre-loss condition. Salvage values are typically low, often as little as 5%-10% of a rug’s full replacement value.
- Fair Market Value: This is essentially what a person might be able to sell a rug for. The most common definition describes a transaction where a willing seller and a willing buyer, both aware of the same facts, agree upon a price satisfactory to both parties. Values of this sort are used for tax valuation, estate dispersal, and for sales between friends. Values can vary depending on a range of factors. Common rugs might have fair market values between 20%-50% of retail. The market value of rare antique rugs can be higher.
- Replacement Value: Sometimes called `retail replacement value’, this valuation is what it would cost to purchase a rug of similar type, age, size, and condition in the owner’s home market. Less common rugs may need to be valued based upon their cost in the national/international market, or at auction.
HOW ACCURATE ARE AREA RUG APPRAISALS?
A skilled appraiser will usually have little doubt regarding the age and origin of a rug unless it very old or rare; even then most rugs can be readily identified. Values are often a matter of opinion factored with market conditions. Rugs do not necessarily go up in value over time. Historically, the relative values of different types of hand made rugs have varied significantly. Fashion can play a role in how valuable a rug may be. Condition is a major factor as well. With modern rugs, value is fairly simple to document. Values for older rugs are at times educated researched estimates.
ARE APPRAISERS, OR APPRAISALS, CERTIFIED OR OFFICIALLY RECOGNIZED?
Not exactly. U.S. State and Federal governments do not have licensing procedures for rug and textile appraisers. National associations of appraisers have members who specialize in rug appraisal. Membership in such an organization does not guarantee the expertise of a rug appraisal specialist. The Courts and the I.R.S. generally look to the trade experience of the appraiser, and the quality of the research and documentation provided in the appraisal.
WHAT ABOUT THE CERTIFICATE I RECEIVED WHEN I PURCHASED MY RUG? IS THAT ENOUGH DOCUMENTATION TO ESTABLISH THE VALUE OF MY RUG?
Certificates are not always accurate statements of value. That being said, it is a good idea to keep any certificate provided, as well as records of purchase cost, a photograph or two, and cleaning records. Such documentation is much better than none at all. For lower value rugs, formal appraisals may be an unnecessary cost. We can provide an opinion of value at no charge.