No, I don't think it does make sense. What is an appraisal but an
estimation of value?
And how is the value of something better measured that the amount one
has to part with
to acquire that something. If the BP is part of what you have part
with, then it must be factored
as meaningful in determining worth.
When MovieArt pays an auction house, for example, $1000 + 195.00BP
for a poster, we don't just
forget the $195.00. In fact, that money goes into our account right
along with the price to determine
the cost of goods.
Similarly, when appraisals are made in the future about that
particular item, this BP is counted, too. John
Kisch included the BPs in his POSTER PRICE DATABASE. It only makes
sense.
On the other hand the seller's premium is really more of a service fee.
K.
On Jul 13, 2008, at 8:41 PM, Jeff Potokar wrote:
this whole topic is deviating from the original idea of an item's
appraised value, not necessarily it purchase price.
here is the scenario, AGAIN-- plain and simple:
A poster has been taken to appraiser number 1, and is said to be
worth $10K. (follow me folks..). the owner of this poster consigns
it to heritage, and heritage also estimates that it is worth
between $9-10K, and states this fact on the auction page. .. again,
so we are clear-- this poster has an appraised value of 10 grand...
the auction may realize a winning bid that is less, or possibly
higher than this appraised amount.
the winning bidder gets the poster for 10K. in order for the winner
to take the poster home, he must also pay the 19.5% BP, which is
the auction house fee/commission (plus shipping, if he isn't in
dallas personally).
the winning bidder (who is in dallas), picks up his poster and pays
a total of $11,950.00. he goes home, happy, and decides to take his
new treasure to another appraiser, for a second opinion.
Appraiser number 2 looks at the poster, and tells the winning
bidder that he would also appraise the piece at $9500-10K.
The winning buyer, in a huff, tells the appraiser he is wrong---
that he has just had to pay a 1950.00 BP at an auction house and
the poster is, in the buyer's own opinion, now worth just under
$12K, because that was the buyer's total outlay. "It IS worth
2000.00 more because i had to pay that, in addition to the ten
grand!" cries the winning bidder.
i guarantee that appraiser number 2 (or 3, 4 or 5) would tell him
that he was wrong. a paid fee for an item (whether it be a poster,
antique furniture, rare coin, etc) is not added on to suddenly
elevate an item's appraised value. that appraised value is in the
object itself.
make sense?
jeff
On Jul 13, 2008, at 6:06 PM, Phil Edwards wrote:
What Claude said - again.
Not sure why some folks are finding this a debatable subject.
You paid what you paid, however the amount was arrived at.
Phil
----- Original Message -----
From: Claude Litton
To: MoPo-L@LISTSERV.AMERICAN.EDU
Sent: Monday, July 14, 2008 10:39 AM
Subject: Re: [MOPO] O.k....Where do you stand?
My initial reaction to all this was ridiculous and I replied as
such. i now find it amusing and relate it to a number of
experiences in my profession which I will relate to you.
I have represented owners of real estate in NYC for many years and
I spend most of my time negotiating commercial leases. These
leases require tenants to pay annual rent. Rent consists of "base
rent" which is the cost per sq. ft. and is the same for every year
of the lease. Then there are escalation clauses which increase
the amount that the tenant pays and they are based on certain
expenses which increase for the landlord and are passed through to
each tenant. Some of these are "operating escalation", tax
escalation, fuel escalation, capital expenses required by law
escalation, asbestos removal cost escalation, etc.
Many times when a lease has been in effect for years a tenant is
shocked to learn that the $100,000 base rent is now $180,000 due
to the escalations in the lease. When the tenant gets a renewal
lease for more than $180,000 he calls and wants to know why the
rent is going from $100,000 to $200,000 instead of from $180,000
to $200,000. The tenant never took the escalation into account
even though he paid it all the years of the lease and many just
cannot grasp this concept.
No matter how you pay the rent or look at the auction results, the
price you paid was the bottom line. For all of you who think the
price is the hammer price and the rest are only incidentals, I
have a question. When you bid, do you take the buyer's premium
into consideration?
My final statement concerns a poster you bought at auction and
decide to sell at a later date. Let's assume you paid $1000 plus
$200 BP. When someone asks you what you paid for it, do you tell
him 1000 or 1200. If you are trying to sell it for 1500 and the
person asks what you paid, I guarantee you will not say
1000-----------period.
I guess by now you can tell I am relaxing because I never write
such long emails. My children are at my home for the week and
they are putting my grandchildren to bed.
CJL
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