The phone rings. The voice on the other end is tinged with exasperation. “My family is working through my late mother’s estate. She’s got lots of antiques and a lot of regular stuff, too. And jewelry. Lots of jewelry. We’re a little overwhelmed trying to figure out what the value on it all is before we decide what to do. We really need help.”
While I can help with much of the estate, there is a group of things outside my areas of expertise – jewelry. And for just this sort of eventuality, I maintain a network of appraisers that specialize in areas outside my own. These I can either pull in to complete a part of your appraisal or simply refer you to them. Always depends on the client’s unique situation.
And speaking of jewelry, I recently interviewed friend and fellow personal property appraiser Tracey Kahle of Kahle Appraisals in Overland Park, Kansas. Her specialty happens to be, guess what? Jewelry! We discussed what appraisers do, how they do it, a few misconceptions regarding jewelry and jewelry appraisals, and how you know you’re getting a worthwhile appraisal product. Read on!
Introduce yourself! Tell us about your background and the kinds of appraisals you conduct.
My name is Tracey Kahle, of Kahle Appraisals. I have 28 years of experience in the jewelry industry. I’m a graduate Gemologist from the Gemological Institute of America and credentialed with the International Society of Appraisers. I provide appraisals for various uses, from insurance to damage claims to equitable distribution of assets, divorce settlement, collateral, estate taxes, charitable donation, and more.
How would you describe what an appraisal is? Are there misconceptions?
It is truly a mystery for most just what an appraiser does. Many think value can be defined immediately even without a thorough inspection or examination, but it’s more complex than that.
Essentially, there are three steps, the first being examination. In this step, I determine the jewelry type, including defining precious metals and gems and authenticate designers or makers. The second step is value research. I examine appropriate marketplaces to determine what values for each piece – an appropriate marketplace being defined as where at item is most commonly sold between a knowledgeable buyer and knowledgeable seller, both in full possession of all relevant facts surrounding the property and both under no compulsion to buy or sell.
Anyway, these marketplaces could be databases, individual vendors, or auction houses, simply depending on the situation. Depending on the intended use of the appraisal, I will search both retail markets, which we consider primary and secondary markets such as auction houses.
Do you find clients confuse an appraisal with an authentication?
Yes, they really do – but appraisals are not authentications at all. While appraisal work is based on readily apparent identity, I won’t conduct an appraisal if I’m not sure about the qualities or composition of an item. If necessary, like when it will have an impact on value, I seek out other experts to authenticate the item before doing the appraisal.
What is USPAP and why do appraisers make a big deal out of it?
I work within the USPAP (Uniform Standards of the Professional Practice) guidelines. USPAP protects the consumer from any type of bias the appraiser may potentially have. USPAP also means that the appraiser is bound to operate without any predetermined result in mind. So essentially, USPAP embodies a higher standard of ethics. As people who buy and sell real estate know, real property appraisers are also bound by USPAP.
Why is it important that an appraiser not work on a contingency basis?
A contingency is against the principles of USPAP, and means one is expecting a certain outcome before any type of research is conducted. Paying an appraiser based the outcome of the appraisal is absolutely unethical, and it’s pretty easy to figure out why.
What is the most common form of appraisal you’re asked to conduct in jewelry?
Insurance coverage, easily. Clients are usually seeking to acquire a scheduled policy for their valuables.
Do insurance companies just accept the appraised value?
I do replacement values for if the insured had a loss. The insurance company can negotiate the level of coverage with the client individually, and they’ll use my appraisal as the bedrock.
How often are a client’s assumptions about their property wrong and how do you correct them?
About half the time. They could believe their jewelry is more or less valuable than the appraised value. More often than not, though, a client has received a piece of paper at the point of purchase with an inflated value. Unfortunately, clients can pay inflated premiums because of that over-inflated value, so you can see where having a professional appraisal done can actually save you money!
Once they figure out the value is inflated, are they ever disappointed?
Many times I’ve been questioned about why the original stated value was so high! My response is based on the simple fact that I cannot speak to the documentation behind that high value, or what it was based upon. But my appraisal work is based on current values, accurate and up to date, researched through industry-recognized marketplaces and databases.
What should one look for in an appraiser – is credentialing important? What sets you apart?
Unlike real estate appraisers, personal property appraisers aren’t required to be licensed. This means anyone, regardless of your level of experience or education can present themselves as an appraiser. But as a professional, I base my credentials on my GIA graduate experience, along with ISA’s appraisal methodology and report writing, and sought credentials through the ISA.
How much education goes into being a credentialed appraiser, affiliated with a professional association?
ISA requires 500 hours of experience in your particular field. They also require recertification every five years. This ensures the appraiser is up to date on necessary requirements and changing laws.
Let’s say I want to become an appraiser. What advice do you have? Where should I start?
The best way to start is to educate yourself in the field you plan to appraise. Get experience in the field buying and selling. Retail can be helpful because it allowed me to first gain experience selling the product. I also spent many years buying on the wholesale level. I have friends and colleagues that work in the auction market that I can rely on for information. After that, I recommend you join a reputable appraisal association that embraces USPAP on top of rigorous report-writing standards. This will inspire confidence in your clients and respect from fellow appraisers!
For more information on appraisals by Tracey or to schedule an appointment, go to www.kahleappraisals.com or call her at (913) 912-9122!