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How to Determine Value

Determining Value of Clocks, Watches and other horological material.

Any items may be appraised by a suitably trained appraiser. The first steps in making an appraisal consist of determining just what the object is and what the purpose of the appraisal is.

Purpose of the value determination

The value associated with an artifact depends on the action it may be used to support.

Estate value

For example an appraisal for estate valuation would generally be conservative because it is in the interest of the client to avoid paying unnecessary taxes on the inheritance.

Auction value

If the appraisal is serving the purpose of determining the minimum sale or reserve price at an auction of the item, the value will be lower than the hoped for sale price, but high enough to protect the seller from unnecessary loss on the sale.

Fair Market value

If the appraisal is a step in a commercial transaction to change ownership of the object, the appraisal is attempting to establish the fair market value. This is generally defined as the value a knowledgeable buyer will pay to an equally knowledgeable seller to make the transaction fair.

Classification of the object

Once the intent of the appraisal is known, the appraiser needs to make some critical determinations of the state of the object.

Object Identification

First the object must be identified in terms of what it purports to be. The description of the object can then be used to determine if similar items have sold and how recently the sale occurred. The description of the object must also be verified and the object authenticated. Identification and authentication may be treated as two separate tasks, but they are often heavily intermingled. If an object is severely altered or an outright fake, it cannot be valued in the class of an authentic example. It may still have value, but not in the class of an original, authentic example.

Object Condition

Once it is determined what the object is in sufficient detail, comparable observations and sales may be collected. In all cases there will be differences in condition of the objects that are found and cataloged as comparables to the current object.

Rarity and Demand

A major determination of value is the availability of similar objects as balanced the market or collector demand for the objects. For example some objects may be very seldom seen for sale but have relatively low demand which prevents the scarcity from having much impact on the value. On the other hand some objects that are essentially commodities may have sufficient demand to maintain a relatively high value.

Intrinsic value

The inherent value of the materials and labor to create an object has a significant impact on value. It is important to realize that a valuable object may not have value equal to the sum of its materials if the demand is small and the supply is ample. When there is significant demand for objects with a high intrinsic value, the premium due to the demand may need to be adjusted upward.

This document will eventually be expanded to a full treatment of this subject

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