This seems like a simple question but I have found that this is what people misunderstand the most about appraisals.
First, it is important to know that the value for different types of appraisals is different. While a painting may be appraised for $10,000 for insurance purposes, the same painting may be appraised for estate purposes for $6000. Don't be fooled. There is no set formula. Instead, the values for the different types of appraisal are defined by the IRS and different marketplaces are used.
What is a Marketplace?
An auction is a market place. A retail store is a marketplace. A flea market is a marketplace. You will often hear appraisers refer to "Fair Market Value" or "Retail Replacement Value". These values are defined by the IRS and an appraiser must use the appropriate market for each type of appraisal.
How do I know What type of appraisal I need?
A good appraiser will understand the different types of appraisals. You will only need to tell them that the appraisal is for "insurance", "sale", "estate", "divorce" etc. The appraiser will then know what type of value to use when appraising your art work.
How does an appraisal work?
When a client calls me for an appraisal this is usually how the conversation progresses.
1. Discuss the reason for the appraisal
2. Explain the contract (the contract states that all information that is within the knowledge of the client will be given to the appraiser this includes but is not limited to bills of sale, insurance records, and auction records)
3. Set an appointment for an on-site inspection
4. Inspect the work for artist, title, condition, size, quality, and subject matter.
5. Go back to office and complete historic research and market research
6. Type and bind the appraisal and send two copies to the client.