Valuation methodology

Valuation schemes 

The proper valuation for any item is the amount it will fetch on the open market at a given time. The problem is that what an item might reasonably sell for is only known for sure at the time and place of an actual sale, and can not be known at the time of valuation.

There are many variables that effect the value of a sale, marketing, fashion, who is wanting to buy at that time. These variables all alter over time, some more predictable than others. Fine Antiques specialise in Antique and Collectables using their in-depth knowledge of the market to help provide strong realistic values.

Market value - Best estimates

Collectors are often very reluctant to sell objects from their collections, so exact values are hardly ever known. In-fact an item selling today will most often not sell for the same value tomorrow. The market value assigned to an item will be a best estimate similar to that of auction catalogues and is useful for last will and testament / estate documentation, or helping to determine asset liquidation priority.

Insurance value - Full replacement.

Insurance policies will often cover objects for full replacement value. A full replacement or Insurance value should guarantee that you will be able to purchase an object which is similar if not an exact replacement in the event of loss. Insurance values are single figure values unlike the range values provided with Market value. The full replacement value is always at the top end of market value estimates and typically only current at the date of valuation.

Determining value

Different objects need to be valued in different ways usually due to their uniqueness. The exercise of valuing an item is is often an in-depth research exercise using any means possible to provide an indication of todays likely value.

Fine Antiques adopt Fair value principles as outlined in NZ Treasury's, Valuation Guidance for Cultural and Heritage Assets 2002,

'Fair value' is the amount for which an asset could be exchanged, or a liability settled, between knowledgable, willing parties in an arms length transaction, often termed 'Market value', 'Open market value' or 'Current market value'.

Exert from FRS-3, NZ Treasury valuation guidance

"... To use fair value in measurement, the first step is to determine whether there is an active market for such assets. In determining the availability of such a market, it is important to consider the function of the asset.  It may be possible to replace the function of an asset not with an identical asset but with another type of asset. Therefore, the absence of an active secondary market for a particular type of asset does not necessarily mean that it cannot be measured reliably.

Where the fair value of an asset can be determined by reference to the price in an active market for the same asset or a similar asset, the fair value of the asset is determined using this information.

Where fair value of the asset is not to be determined in this manner, the fair value of the asset is determined using other market-based evidence, such as recent auction prices and dealer catalogues."

Catalogue value

It may seem silly to state, however it is important to remind oneself that auction catalogues are for collections of items for sale at a particular date. The point is, that estimated prices within a catalogue, or realised prices are for that date. Reference to such prices must be adjusted to relate todays pricing.

Auction catalogues often provide suggested market values displayed as an estimated range. It is often possible to find an example of an item to be valued, or a similar example to reference.

Auction estimates are merely the auctioneers professional opinion on their resale value. The estimate itself has an effect on the actual sale price setting up the audiences expectation and is often self for-filling or what we like to call Sale-for-filling.

Post auction realised prices are often published and can provide indication towards Full replacement value. These prices are largely impacted on who was at the auction on the day and are often used as a reference to support or reenforce expert value. Full replacement value will often be different to the realised auction value as the valuer must consider the price and the likely hood that the realised price indicates a wholesale, retail, or hyped up over priced item (created when the emotion of bidding causes competitive bidders to become overly emotional).

Dealer or collector value

Local auctioneers, antique shops, second-hand shops and experienced private collectors are other resources available for collecting realistic New Zealand prices.

International online value

Now that items are freely available through international trading, replacement examples can be referenced through online shops and auction sites. With international examples, exchange rates, postage & packaging, local taxes and import duties are all taken into account.