While the value of an antique or collectible ultimately comes down to what someone is willing to pay for it, figuring out how much that should be isn’t as straightforward as people might imagine. Why? Because an antique or collectible has three different values: its auction value, its retail value, and its insurance value. Let’s break down the differences between the three.
As the term suggests, an auction value is what an item is expected to sell for at auction. With common objects, auction prices are typically lower than what they would sell for in a collectible shop or antique store. In fact, most ordinary pieces will typically fetch a sale price that’s closer to a dealer or wholesale rate. This is due to the “common” nature of the piece combined with the short amount of time it’s available for purchase. In a retail setting, a dealer can ask, and often get, a higher price because they don’t have to sell in a defined period of time, nor do they have to accept offers.
Conversely, rare and highly sought-after items typically command a higher price at auction. This is due in large part to the competitive bidding of collectors vying for the same piece. This is why rarer and more valuable items are often sold at auction versus a retail setting, as it’s often the best way to achieve a maximum return on a highly desirable object.
A retail value is the price an object is expected to bring in an antique store or collectible shop. As explained above, if your object isn’t rare or incredibly expensive, its retail value will likely be higher than its auction value.
Remember, though, dealers can’t (and won’t) pay retail value for your objects. If they did, they wouldn’t be in business for too long! Instead, they’re going to look for the same type of items at auctions and other venues in which they can buy closer to a wholesale price.
For significant and valuable antiques and collectibles, appraisers also provide what’s known as an insurance value; the amount of money required to replace or repair an object in a “reasonable amount of time” if it was destroyed, stolen, or damaged.
Insurance values typically rest at the top-end of retail values, so a collector will have enough money to buy an equivalent item from a dealer at full retail. Different from auction and retail values, appraisers will issue insurance values through official written appraisals. This type of appraisal will require paying a reputable professional appraiser―someone who’s professionally certified and whose fees are hourly, not a percentage of an object’s appraised value.
While not a defined valuation process, you must also take into account the region in which your object would be sold or purchased. For example, an antique dealer in Beverly Hills, California will have higher overhead and more affluent customers than a dealer in Homer, Georgia. Generally speaking, customers are going to pay more for the same item if purchased in Beverly Hills!