An Appraiser War Story

by Mark Grove

Details of this story have been altered to preserve anonymity.

When we appraisers gather together at chapter meets or national conventions, it is not long before assignment anecdotes are swapped back and forth for entertainment and edification. With any other group these might be called war stories or even fish stories, with each tale-teller trying to outdo the next with a yarn of greater complexity, risk, or humor. After three decades of business experience in the world of antiques and art, I thought that I had encountered about every issue and permutation of difficulty possible.

I was wrong.

This account begins with a dealer friend who had passed on my name with kudos to his client of some years, a woman who had recently relocated to Charlottesville. Not five minutes had passed after putting the phone down when I received a call from the prospect, a cultured woman, judging by her manner and use of the language, who proceeded to exclaim softly that her prized antique furniture, especially a tall-case clock of considerable value, had been mauled by her moving company. I commiserated with her about similar cases I had recently been involved in and mumbled something to her amusement about how one cannot expect excellence from lower primates.

With the ice broken, I told her a bit about myself, delineated my credentials, and explained the USPAP*, my standard protocol, and so forth. As usual, I suggested that the most economical approach for any claim action would be if the property owner collected the repair estimates and submitted them to the moving company, leaving me out of the picture. She was emphatic that I become involved because AIG was her insurance company, and with the recent economic fiasco, there was a sense of urgency, etc. My function, she said, was to establish diminished value and replacement value. I agreed.

The inspections lasted for four hours, with me often on my hands and knees, wielding a flashlight, and with her holding the back of one hand to her forehead. There were 15 subject properties.

The first object was a common blue and white Meissen vase of small value. My advice was to replace it rather than seek repairs unless it had sentimental value. It did not. She agreed.

We moved on to the next piece, a circa 1890 American octagonal wall clock by Seth Thomas. Its only problem was one missing carved spandrel. It was at this point I first explained diminished value and told her that the clock indeed would suffer permanent loss of worth because of the missing element. I recommended a local restorer who might do the work.

The third property was a circa 1890 marble-top French serving table. The only obvious damage appeared to be that the slab had split into two equal pieces, a noticeable recent infliction that also resulted in diminished value. I explained that repairable damage to European furniture did not typically cause diminished value; however, a split marble top in the relevant market was a significant detraction. I further explained that the opposite is true of Americana. Even slight damage to pristine American antiques can cause a significant reduction in value because Americana collectors are notoriously finicky. I know this because I am an Americana collector.

Next we moved on to the tall-case clock, which I expected to see as bits and pieces in a cardboard box from the way she had explained it earlier on the phone. As we rounded the bend to a ballroom-size entrance hall I was surprised to witness a circa 1780 Dutch timepiece standing at attention. I peered at it over my progressive lenses and wondered if it might be the basket case that had brought my dear lady to infarction. Indeed, it was. I must have frowned or raised my eyebrows at that instant because when I told her that I could see nothing wrong with it she proceeded, in a very animated fashion, to point to numerous calamities that had been visited upon her valuable timepiece.

Contrarily, I politely diagnosed only two recent injuries: a broken sliver of veneer with the mass of three toothpicks and a loose waist molding. Always able to detect the slightest innuendo in body language, I thought perhaps the moment was opportune to assuage her obvious distress by suggesting to her that the movement should be examined by a clocksmith to be certain that it had not been affected. Quickly, because I saw the light fading from her eyes, I whipped out my BlackBerry, dialed a reputable smithy in town, and made arrangements for the clock to be picked up later that same morning by a local hauler of some repute. This action seemed to have a calming effect on the client, but I could tell from her demeanor that I had been demoted.

The remaining 12 pieces of European furniture were similar to the tall clock as far as the extent of damage they had received in transit: minimal. Each had minor problems that I believed could have been remedied with yellow glue, a bit of piecing, clamping, and chiseling. I explained to her that in my opinion there were no significant injuries, and in my on-the-spot estimation, the cost of in situ repairs by the same fellow who was to do the wall clock would be around $500.

Clearly exasperated with me by this time, the client disagreed vehemently, explaining that it had been her experience that repairs of this nature would be eight or ten times my estimate and that it might take months to execute. I disagreed just as vehemently, stating that all of it could be done over the course of two half-days, the first to glue and clamp, the second to remove the clamps and then to neaten up afterward. She told me to make the call to the repairman.

He faxed his estimate for all of the repairs on the 12 pieces of furniture and the two clock cases to me the next day. It was for $4400.

I was apoplectic. Embarrassed that I had recommended the charlatan in the first place, I called him for an explanation. His answer was that the client always establishes what the injuries are because only the client knows the original pre-transit condition of the subject properties.

Damn, he's good, I thought. That is the same kind of logic I use in my reports, which we appraisers use in our arguments. But it still did not sit well with me, so I called two senior colleagues and ran the story by them. Both advised me to cut my losses and bail out of the assignment; it's too risky, they told me.

For three more days I mulled it over every which way possible. Finally, I called the client and told her my thoughts: that in my opinion the repair costs were too high and the risk too great, and that I would drop the case without compensation. She was alarmed by my intent and reiterated that in her experience repairs of this nature were indeed this great. She asked if I would please reconsider so she would not lose credibility with AIG. She also stated that her insurance was a Private Client Group type policy and that it covered whatever the costs were when a claim was made. Still I hesitated. Finally, she again told me how very particular she was and that I should ask her dealer, the person who had referred her to me in the first place, to verify the extent of her natural meticulousness.

And so I did. My dealer-friend corroborated the client's fastidiousness. He informed me that he had never met anyone more particular, that perfection was her life pursuit, and that unless something was without flaws she was not interested in it.

I had an epiphany at that moment, sort of a mental explosion. I thought that he could have been describing me because I have exactly the same tendencies as my client. There isn't anyone fussier. Tellers and clerks flee at a mere glimpse of me.

Only then did I remember an incident when I was the one who invoked an insurance policy. It was when my Volvo was in a relatively minor accident a few years ago. I sent it to the very best body shop in town. The repairs were $12,000. Other body shops would have been half that. I didn't care what it cost. I wanted it to be perfect again. I wanted the best for my, my baby.

The insurance company paid without hesitation, no questions asked. Not just the costs for repair, but for my peace of mind too. Suddenly there it was: The Answer. It had been staring at me in the mirror the whole time. We appraisers are not supposed to be gatekeepers or financial advisers; we are measurers, measurers of value or loss of value. With whom clients spend their money is of no consequence to us, just as it is of no concern to us the outcome of any contest, such as in divorce cases.

The client was right. The repairer was right. I went back to work.

The first thing I did was draw a demarcation line below the first three properties: the vase, the wall clock, and the marble-top server. These three items were subject to the USPAP and required retail comparables to justify the respective conclusions based on their replacement values. The vase was a loss, and both the wall clock and the server suffered diminished value, which had to be based on their respective replacement values.

The remaining properties under the demarcation line did not require comparables and thus did not fall under the jurisdiction of the USPAP. They were merely a laundry list of repairable properties that had not suffered diminished value. Their treatment and appearance as line items within the report were the same as with three USPAP properties except that comparables were not required. The costs to repair these 12 damaged properties were submitted as repair estimates, they were not corroborated nor justified, and second estimates were not required.

The final report included replacement cost, diminished cost, transport cost, repair costs, and appraisal cost. Not being able to wrap my head around the case in the first place almost cost me the assignment, and if that had happened, that would have cost my client.

My point is this: appraisers should not hesitate to accept difficult assignments that will advance their skills, and they should butt out of how other people spend their money.

*USPAP stands for the Uniform Standards of Professional Appraisal Practice, which are the regulations set by the Appraisal Foundation and recently mandated by the IRS.

Mark C. Grove is an independent accredited appraiser and a member of the American Society of Appraisers (ASA) and the Appraisers Association of America (AAA). He resides in Charlottesville, Virginia, and may be contacted at <mark@mgrove.com>.

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