Continued From: How To Bid At A Cruise Ship Art Auction
First, it’s important to realize that all items -including art work- have more than one value. An artwork can hang in a gallery and be priced at $1,000. Then the gallery goes bankrupt and has a liquidation sale. The $1,000 artwork sells for $150. Retail value, liquidation value. There is also insurance value, gift tax value, auction value, fair market value, and cash value. The highest appraised value for anything is insurance value. Cruise ship art appraisals are based on insurance value, and this is stated clearly in the terms and conditions at the beginning of the auction. If an item is being insured, you have to have enough coverage. The lowest is liquidation value, sometimes called auction value. If you took your artwork to an auctioneer for his opinion, which value do you think he will give? Auction value, of course. And the owner at the retail art gallery? Retail value. Same item; six different values.
Secondly, appraisal is a research job. An appraiser must support his conclusions with evidence, not just opinions. The appraisals offered with cruise ship art are backed by data from hundreds of weekly auctions and gallery sales. Appraisals just backed up by an individual’s opinion are thrown out of tax court every day, regardless of the credentials of the evaluator. Have you ever seen Antiques Roadshow? When stating a value, the Roadshow experts always say something like “I believe this item could bring $XXX at auction”: auction value. A thorough appraisal can take days. Don’t expect that an off-the-cuff opinion by your local gallery owner or auctioneer qualifies as an appraisal.
Cruise ship art auctions are fun, and the art purchased on a cruise can give you pleasure every day that it hangs on your wall. Don’t let naysayers keep you away from what could be a wonderful experience on your cruise.
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Originally posted 2011-03-11 11:01:00.