Frequently Asked Questions

Why should you hire Penelope Dixon & Associates?

1. Penelope was the first appraiser to be certified solely in the field of photography. As such, we can say that our firm has been the longest active appraisal firm, since 1983, specializing in appraisals of fine art and documentary photography. We also have the largest staff and associate base in the industry dedicated to appraisals of photography.
2. Penelope or members of her staff have closely monitored every photographic auction at Sotheby’s, Christies and Phillips in New York since 1978.  Members of the firm also regularly attend a number of major photography expositions in this country and Europe every year. It is only through this work that we can be up to date with current trends and values.
3. The majority of other appraisers of photography do something else in addition to this work, either as generalist appraisers or as dealers and gallery owners. They are also seldom seen at all the auctions or fairs. We pride ourselves on our dedication to the appraising profession.
4. We maintain a database of not only our clients’ collections, thereby giving us instant access to current values on over 60,000 photographs, but also of over 10,000 additional entries on other information such as pricing data, exhibitions and publications on a wide variety of photographic artists.
5. We have representatives in most major cities in the North America and Europe and therefore can attend to your appraisal needs in most cases very promptly and without additional travel expenses.

How do you charge?

Our fees are based on the amount of time required to complete an appraisal assignment.  We offer competitive rates based on the fees below for the personnel most suited to the task.

• Founder and Primary Consultant:  $400/hour
• Primary Appraiser:  Edward Yee:  $375/hour
• Secondary Appraisers:  $275/hour
• Office Staff:  $100/hour

Why do I need an appraisal?

Appraisals can be required for a variety of purposes, including donation, insurance, and fair market value.  Please see our available services page for detailed explanations of each.

What is required for an appraisal?

When contacting us please be prepared to provide as much information as possible about the artist and material to be appraised including: Artists Names, Number of Pieces to be Appraised, Purpose of Appraisal, Condition of Works and Location of Works.

How long will the appraisal take?

An appraisal will typically take 30 to 60 days to complete from the date of inspection.

How do I acquire an appraisal?

After contacting us and providing all of the required information, an appraisal agreement will be sent with a request for a retainer.  Once the agreement and retainer have been received, the inspection can commence.  Upon receipt of all requested documents the appraisal will be completed according to the schedule outlined in the agreement and a final invoice will be sent if further monies are required.

When do donations have to be given?

A donation for the current year must always be made prior to December 31st of the same year.  An appraisal can still be done after December 31st as long as the material has already been donated to the institution.

What is Fair Market Value?

Fair Market Value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell, and both having reasonable knowledge of relevant facts.

How is Market Value defined?

The most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus.

What are the various types of values used in appraisals and when is each used?

1. Fair Market Value, the most commonly used value approach, is the price at which the property would change hands (in the market where the property is commonly sold) between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts. Fair market value is used for donation, archive and estate appraisals.
2. Market Value is based on the same assumptions as fair market value with the exception that there is an assumption of sale within a specified time period and possibly a specific market in which the property will sell. Market value would be used in cases of some estate appraisals as well as equitable distribution appraisals.
3. Marketable Cash Value, also known as Equitable Cash Value, represents the net proceeds to the seller to be expected from the sale of property and can be the based on either fair market value or market value types of sales. Marketable cash value can also take into consideration expenses such as commissions, insurance, advertising, shipping, etc. that may be involved in the sale. This type of value might be requested in the case of liquidation appraisals.
4. Retail Replacement Value is the price in terms of cash or other precisely revealed terms that would be required to replace a property with another of similar age, quality, origin, appearance and condition within a reasonable length of time in the appropriate market. This type of value is used for insurance appraisals and is usually based on retail values of the same or comparable properties.
5. Liquidation Value is the probable price in terms of cash or other precisely revealed terms for which the property would change hands and is sold either in an orderly manner with some limited conditions (Orderly Liquidation Value) or sold immediately without regard to the most relevant market place (Forced Liquidation Value).

What are the different approaches used to establish value?

1. In the Sales Comparison Approach to value, the appraiser locates sales and asking prices of items comparable to those being appraised to discern patterns that point to your item’s most likely value. 
2. The Cost Approach to value is based on the cost to replace a property with an equivalent substitute which is new, using modern materials, techniques and standards which satisfies the description of the replaced property. This valuation method is sometimes used in large archives or estates for negatives or study material.
3. The Income Approach to value is based on the expected income stream from a body of work, either through reproduction or usage fees paid for the images, or future printings from the negatives or digital images.
4. Adjusted Market Data Approach to value takes past auction or retail sales and increases them to present day values based on an adjusted rate of inflation.

What are the different kinds of appraisal reports and what do they include?

1. Appraisal Reports summarize the appraiser’s analysis and the rationale for the conclusions.  This is the most thorough type of appraisal document currently available.
2. Restricted Use Appraisal Reports might not include sufficient information for the client (no other intended users are allowed) to understand either the appraiser’s analyses or rationale for the appraiser’s conclusions.

What is a Professional Opinion of Value

A professional opinion of value (or POV) is not a formal appraisal but rather, an opinion of value, professionally rendered but not duly and fully researched.  It is not USPAP compliant and it is less expensive than a formal appraisal and is useful when a client wishes to know the value of their property for marketing or planning purposes.

What is USPAP?

USPAP stands for the Uniform Standards of Professional Appraisal Practices as developed by the Appraisal Standards Board of The Appraisal Foundation.  Since the passage of the Pension Protection Act of 2006, appraisals done for IRS purposes must be USPAP compliant.

How is value defined?

Value is a term and topic so ubiquitous in our culture that everyone thinks they understand what it means, when, in fact, there are many types of value, some of which are tangible while others are not. Intangible values typically include those which are cultural, academic, and historic, which, although acknowledged, are very difficult to quantify, particularly in terms of money.

In the tangible arena, value is typically measured as it relates to currency, but even then that is a highly simplified metric. Most peoples’ experience with value relates to the exchange of goods and services for money (i.e. you buy a coffee for $4.00 at Starbucks), but anyone who has participated in real estate transactions, for example, knows that the asking price is not always the final price. This is particularly relevant when trying to establish the value of art given its subjective qualities and the fact that the variables which drive price are often shrouded in mystery or are unquantifiable (the acquisition of “trophy art” for example). As such there are many definitions of value, some of the most common of which include the following:

Retail Replacement Value is defined as the highest amount that would be required to replace a property with another of similar age, quality, origin, appearance, provenance and condition within a reasonable length of time in an appropriate and relevant marketplace. When applicable, sales and/or import tax, commissions and/or premiums are included in this value. This value is most commonly used for insurance purposes.

Alternatively, Fair Market Value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts. This value is commonly used by agencies including the IRS, Revenue Canada, and CCPERB for the purposes of determining the value of charitable, non-cash contributions to non-profit organizations.

Lastly is Marketable Cash Value which is lower than Fair Market Value, as it takes into account all reasonable expenses in connection with selling an item, or a collection, and reflects the resulting net amount retained by a seller.

Given these different value definitions, it is important to understand key differences as they relate to fair market value. Notably, fair market value is a hypothetical value that attempts to establish a value without the actual transfer of title for the object(s) being appraised. As such, fair market value takes into consideration both retail and auction markets. Inherent in the definition is the concept of value which is an opinion, as opposed to fact. Ultimately, an appraisal conducted by a “qualified appraiser” is a professionally informed opinion of value that looks at realized prices, sales history, and to some degree asking prices, all of which are facts that need to be taken into consideration in the establishment of fair market value.

Important things to remember when determining fair market value are the following:

1. An appraisal looks at value as of a specific date, for a specific use. It is not an indication of future value, it relies heavily on previous sales. As such, asking prices that are higher than typical market activity cannot serve as the basis of fair market value; more important are the actual realized sale amounts.

2. All values, regardless of the specific definition, must be justifiably explained and supported by multiple sales. For example, just because a single work for an artist sets a new record at auction does not mean that all works by the same artist have increased in value.