What is an Appraisal?

What is an Appraisal?

An appraisal, either for art, jewelry, or memorabilia is a document that helps determine value. Different types of appraisals include fair market value, liquidation value and replacement value. These can all vary significantly– but the most typical appraisal is for replacement value, which reflects a “retail replacement price”. These appraisals are sent to an insurance company if the piece is damaged, stolen, or lost. These appraisals are supposed to represent a true replacement value, but are often severely inflated.

New York Loan Company, Manhattan’s luxury pawn shop, is often asked about appraisals and if they are required for a collateral loan. The answer is that while it is not necessary, it certainly can’t hurt. The loan officers at New York Loan will gladly take into consideration any appraisals, insurance documents, or point of sale documents (receipts, invoices, etc.); however, they may not necessarily have the impact on the loan that you would expect.

“The retail price of an item, like a diamond engagement ring, is very different than what the diamond trades for on the secondary market – or the wholesale market,” said Jordan Tabach-Bank, owner of New York Loan and its west coast counterpart Beverly Loan Company. “These documents are necessary for insurance purposes – but in terms of valuing a loan, particularly against jewelry and watches, our gemologists are the best in the business.  I have seen us loan a fraction of the insured value, and, believe it or not, we have loaned double the insured value; our team is more qualified than your average appraiser.” The exception to this rule, as Tabach-Bank clarified, is if a piece of jewelry is signed. “The retail price of a signed piece of jewelry, often reflected on the appraisal, from Harry Winston, Tiffany & Co., Graff, Cartier, or David Webb is much more significant than it is for an unsigned piece.”

In the world of fine art having provenance, or documents that confirm authenticity, is incredibly important and that provenance can include appraisals from reputable companies. Other forms of documentation for fine art include gallery receipts, certificates of authenticity, and auction records. This is especially important for popular household name artists like Roy Lichtenstein, Andy Warhol, Jeff Koons, Damien Hirst, John Baldessari, or Keith Haring.

Specific requirements must be met for a pawn loan against numismatic coins, sports and entertainment memorabilia, luxury handbags, and rare wines, all of which are outlined on the New York Loan Company website .   In addition to an appraisal, authentication from a trusted source is also extremely helpful, including a GIA certificate for a diamond, or a PCGS report for a coin

New York Loan Company recommends bringing all relevant documents when pawning an item – but it’s important to know that replacement value and retail price are very different than what the item may actually trade for. 

For any questions or to make an appointment with a loan officer at New York Loan Company, please call 212.997.5626 to stop by their offices in midtown Manhattan.