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Are Appraisals a Ripoff?

treeofpain

Gold Supporting Member
Messages
7,184
I've buying and selling guitars for a long time (over 25 years), so I either have enough knowledge myself to make a buying/selling decision, or I know where I can quickly get that knowledge (people, websites, etc).

However, I understand that a lot of people don't have this background, and one of the options on the market today is an appraisal. Typically, the customer sends pictures and details about the guitar in question, pays a $50 fee, and the appraiser sends back a detailed description of the item, along with an appraised value.

On the surface, this sounds like a very valuable service. But due to some experiences over the years, I wanted to play devil's advocate here:

1. There are enough caveats in a boilerplate appraisal to make it functionally worthless.

2. Since the appraiser does not have the instrument in-hand, things like repairs, refinishing, or replaced parts (all of which can significantly affect the value) can easily go undetected.

3. The appraiser has an incentive to appraise the item HIGH. They are selling a service. The higher the appraisal, the happier the customer will be. I'm not saying that the appraisal will be inaccurate, but it will almost always be optimistic.

4. Sometimes the appraisal is done for insurance purposes or financial documentation, which is fine. But many times the appraisal is done just prior to placing the guitar for sale, which is terrible for the owner and for anyone who may want to purchase the guitar, and here's why...

5. The owner (who is now a seller) has an inflated value in his/her mind, based on the appraisal. They try to sell for this price and fail. They get offers that are substantially lower. Instead of questioning the appraisal value, they question the ethics of the people making lower offers. This results in a stalemate. The guitar is never sold. The seller never gets paid. The potential buyer doesn't get the guitar. Everyone loses except the appraiser, who gets paid $50 to review a couple of pictures and write a paragraph of information that can easily be found through a Google search.

A recommended alternative for sellers? Get an in-hand detailed description of the guitar from an experienced dealer or collector (and pay them to do it well). Then shop the guitar - the highest bid wins. Forget the "theoretical value".

What do you think?
 

Jon C

Silver Supporting Member
Messages
17,553
For insurance coverage of an instrument of any significant value, definitely worth having.

Those are the only ones I've paid to have formal appraisals.

If I'm buying I'll make my own judgment based on various sources. I'm not going to influenced much (at all?) by seller's appraisal, I'll decide what it's worth to me.
 
Last edited:

old goat

Member
Messages
1,987
I would think that for a frequently faked vintage guitar an appraisal would be very valuable for determining authenticity. This might require a hands on inspection though--I don't know.

I paid $100 for an insurance appraisal and repair of bad ground, obviously hands-on.
 

treeofpain

Gold Supporting Member
Messages
7,184
I have no problem with in-hand inspections to determine authenticity, especially for high dollar vintage instruments. And the inspector should be fairly paid for this service.

I'm mainly questioning the "Send us a few pics and we'll tell you what your guitar is worth" type of thing.
 

Jay K

Member
Messages
2,305
The only reason I have had appraisals done is for insurance purposes, and I have only had in-hand appraisals. If all I am interested in is determining what a guitar I own is worth, there are plenty of resources including sold items on Ebay, the Blue Book of Guitar Values, the Vintage Guitar Price Guide, Reverb's price guide, and so forth. No single one of these is definitive, but if they are relatively close from that one can get an approximate market value.

As to evaluating the condition of my guitars, in situations where I am unsure I take them to my techs/luthiers, who give me free of charge their assessments of the conditions of my guitars. I suppose they do this because I also use their services for repairs and set-ups.

Having said all this I am rather skeptical of appraisals done at a distance. I also wonder whether insurance companies accept them as a matter of course.
 

stevieboy

Clouds yell at me
Gold Supporting Member
Messages
37,877
I suspect that people offering this service have done so because of often being asked for them. And by people who don't want to provide the guitar itself. They don't feel like they should do them for free, and they also don't want to say no. So, set a fee, provide a service for your customers, make a little dough though not really that much, even though they expend less effort than they probably do for other things they do that they make 50 bucks for doing.

So no, not a ripoff. Is it worth it? Different question--for most of us here, probably not.
 

MarkLyon

Member
Messages
1
I've buying and selling guitars for a long time (over 25 years), so I either have enough knowledge myself to make a buying/selling decision, or I know where I can quickly get that knowledge (people, websites, etc).
It’s common to be optimistic about a stock before buying it. The problem is that optimism can get you into trouble

Many studies have shown that when investors try to time the market, that is guess when a stock is low or high and try to make a profit on the difference,Another problem with buying and selling stocks quickly is transaction costs. In other words, even if there was a way to time the market and make a profit, costs such as broker commissions, taxes, etc. would eat away at those gains.
 

SPROING!

Member
Messages
8,796
I don't see how anyone could appraise a guitar accurately without having it in hand. Based on pictures? No way.
 

NewLeaf09

Member
Messages
2,586
What do I think? I think you've been annoyed by a seller or sellers who have based their sales prices on drive by appraisals and you didn't get what you wanted as a result.

On timing the market, I have a relative who is a broker with his own company who has gone bust a couple of times, living in his car and showering at his gym kind of bust, by day trading his own account. From what I can tell, there aren't but a very few guitars which have the kind of appreciation potential to qualify as investments and buying those for a quick pop doesn't seem like a good idea, unless it's from someone who pulls a burst out from under a bed and thinks it's maybe worth what her hubby paid for it sixty years ago. Probably better off running a bottom feeder ad in the Emporium and trying to make it pay with volume.
 

onemoretime

Senior Member
Messages
2,862
1. There are enough caveats in a boilerplate appraisal to make it functionally worthless.

2. Since the appraiser does not have the instrument in-hand, things like repairs, refinishing, or replaced parts (all of which can significantly affect the value) can easily go undetected.

3. The appraiser has an incentive to appraise the item HIGH. They are selling a service. The higher the appraisal, the happier the customer will be. I'm not saying that the appraisal will be inaccurate, but it will almost always be optimistic.

4. Sometimes the appraisal is done for insurance purposes or financial documentation, which is fine. But many times the appraisal is done just prior to placing the guitar for sale, which is terrible for the owner and for anyone who may want to purchase the guitar, and here's why...

5. The owner (who is now a seller) has an inflated value in his/her mind, based on the appraisal. They try to sell for this price and fail. They get offers that are substantially lower. Instead of questioning the appraisal value, they question the ethics of the people making lower offers. This results in a stalemate. The guitar is never sold. The seller never gets paid. The potential buyer doesn't get the guitar. Everyone loses except the appraiser, who gets paid $50 to review a couple of pictures and write a paragraph of information that can easily be found through a Google search.

A recommended alternative for sellers? Get an in-hand detailed description of the guitar from an experienced dealer or collector (and pay them to do it well). Then shop the guitar - the highest bid wins. Forget the "theoretical value".

What do you think?
1. Not true. It is representative of the current value based on its condition only.
2. Agreed. The appraisal should always be done in-hand.
3. Disagree. The appraiser has nothing to gain by overstating the value and risks loss of reputation (because of 4. and 5.) if the value is overstated.
 

Jayyj

Silver Supporting Member
Messages
8,903
I do appraisals for violins. Our wording is 'estimated value for insurance purposes' ie what it would cost to walk into a shop tomorrow and buy an equivalent instrument should yours be lost or stolen. I always explain the significance of this wording, that it isn't a recommended selling price or a guess as to how much it might still for on Ebay. Translated into guitars, if you own a '62 Tele and it gets stolen you want to replace it quickly and painlessly, so you insure it for what it would cost to go to Gruhn or Umanov and buy a similar guitar - the chances of you selling that Tele privately for the amount you'd pay those guys for one are extremely slender.

I can understand why some dealers offer a valuation from photos - if you need a professional valuation for insurance purposes (rather than authentication) and the nearest vintage dealer is a day's drive away then it seems a reasonable alternative as long as the letter states the instrument was not examined in hand. Either way, if the dealer take time evaluating an instrument in hand or in photographs and typing up a letter a charge for his time is appropriate. If that letter is then taken as proof of authenticity further down the line it's up the the buyer to make a call about whether it's enough. Identification from photographs would make me nervous if it were my money on the table but some people in the vintage community are scarily good at it.
 




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