Valuation or Evaluation or Appraisal – is there a difference? 

When it comes to valuing art, antiques or collectibles, the words valuation, evaluation and appraisal are often thrown about interchangeably. 

In casual discussions they are often generally accepted as meaning the same thing.

However, when valuing high worth items it is important to acknowledge their definitions as there are vital differences in their methodology and legal standing.

While the interpretation of these words can be a bit open depending on who you speak to, we at iValuations use them as such:

Evaluation

This word pertains to what a valuer is doing when looking at an item, which is evaluating it. They will normally begin with a quick assessment of the item, and decide whether it is worth continuing onto the valuation process.

If looking at a painting for example, they will quickly identify what medium it is, what the quality of the work is, the composition, the condition and so on. 

If then deemed an object of sufficient monetary worth, they will then go on to gather its physical aspects such as its dimensions and photograph it for the report.

They will then also inspect it more closely, which might involve removing from its position and inspecting it from behind to identify any past restoration or alteration. The parts of an object that cannot be immediately seen often hold more important clues than the visible parts.

If need be, a black light, or a loupe, might also be employed to identify other hidden or finer detail.  

They will also enquire if it has any known provenance and how it ended up being where it is. As much information as possible is collected for accuracy. 

At this point the valuer could probably give a quick, verbal, non-binding idea of value. This determination will be based on their own knowledge and experience with the market, and perhaps even biases. 

It takes in no account of researching the up to date market, such as a checking past auction records and current events in said market.

Valuation

This is the next step in the process and pertains to how the valuer goes about establishing the value of an item.

After the evaluation they will now have all of the important physical attributes of the item in front of them, as well as any applicable provenance. 

Depending on the valuer’s experience, they should already have a good institutional knowledge of what they are dealing with, and most could apply a definitive value to the item already.

However, depending on the type of item it is most often worthwhile to consult recent market activity. This pertains particularly towards art, or any other area of the collectibles market where there is robust activity.

Keeping abreast of current trends and fashions, as well as any important events such as a significant collection coming to market means that the valuer will be up to date with how the market is behaving.

Once all of these various bits of information have been collated, be it from auction records, gallery sales or even the pages of fashion magazines, the act of fixing a value to the valuation can be applied.

In our valuation reports at iValuations we give two values for each item – a fair market value (FMV) and an insurance value (IV).

We take the approach that an item has three separate monetary values that can be applied. In addition to the FMV and IV, there is also the selling value (SV).

The selling value pertains to what an item could sell for at auction, or to a specialist dealer who intends selling on the piece for profit.

A fair market value is what you could expect to sell your item for in the public domain. It tends to be slightly higher than an auction price but less than a shop or gallery price, and is based on the ‘willing seller, willing buyer’ model.

An insurance value tends to be higher than an FMV and is more closely related to shop or gallery prices. It reflects the value if one had to immediately replace the item should something happen to it, such as it been stolen or damaged beyond repair.

The IV might also take in to account other things such as framing or transport costs.

It is important that the valuer is aware of all three of these values as they are vital pieces in the makeup of a valuation report. 

Often, the disparity between the IV and the SV can be significant, as we all know that what one can sell something for is often far less than a similar object is available for in a high-end gallery where the owner has significant overheads to cover.

Appraisal

At iValuations we interpret appraisal as the sum of the terms above, the evaluation and valuation. 

In other words the item has been evaluated, the values have been determined and applied, and an appraisal report can now be typed up containing this information.

This normally involves attaching the relevant images of the piece, as well as writing up the report using the correct terminology to describe it, it’s condition and any other important details that are to be included.

Here at iValuations you’ll find experts in over 50 categories of art, antiques and collectibles that are waiting to give impartial professional, affordable and in-depth appraisal reports in a timeous and easy to use manner.