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C.  JEWELRY, ART, ANTIQUE APPRAISALS AND IMITATIONS

Jewelry, art, and antique appraisals are obtained to determine the proper amount of insurance needed to cover a purchase or loss, to determine the reasonable fair market value of an item donated to charity, and to compute appreciation of antiques and family heirlooms when distributing assets or figuring estate taxes. Appraisals are also commonly obtained for private sales and for determining the fair market value of marital property upon divorce.

Finding an Appraiser

Neither state nor federal law requires a personal property appraiser to acquire a license or certification. There are no formal standards of competence or minimum qualifications; anyone wishing to call himself or herself an appraiser may do so.

The American Society of Appraisers (ASA) requires its members to have degrees from accredited institutions, attend continuing education courses, adhere to ethical standards of the organization, have at least five years of accredited experience, and sit for a recertification exam every five years. The ASA maintains a directory of members and certified professional appraisers and their areas of expertise.

The Appraisers Association of America (AAA) is the second most valuable source for obtaining a qualified appraiser. Membership is acquired by a two-thirds vote of the seven-member board of directors. Certified members must pass a written and/or oral examination. The AAA has a similar, although less extensive, code of ethics as the ASA. Both groups can give you a list of reliable appraisers in your area. You can also contact your insurance company, bank, local university, museums, antique shops, or auction houses.

Choosing an Appraiser

Always choose an appraiser with a degree in the specialty that most closely relates to the object to be appraised. For example, estate appraisals are divided into such specialties as commercial, residential, and income properties, which are further divided into urban and rural properties.

Other specialties include business valuations; machinery and equipment appraisals; technical valuations for boats, airplanes, and autos; personal property (divided into fine arts, antiques, furniture, jewelry, and household goods); and gems and jewelry Avoid the dealer, jeweler, curator, historian, interior decorator, artist, or auctioneer who appraises a variety of items.

Always choose an appraiser with a degree in the specialty that most closely relates to the object to be appraised.

When interviewing an appraiser, ask the following questions:

• How long have you been an appraiser?

• Is this your full-time profession?

• What is your general appraisal and education background?

• What specific experience do you have with the kind of property I wish to have appraised?

• Are you a member of a professional appraisal society? Which one(s)? Does that society teach, test, and certify?

• Have you undertaken any continuing education to keep you up-to-date in the field?

• What do you charge, and how do you determine your fee?

• For whom have you worked and what are your references? (Look for business references, banks, insurance companies, museums, etc., and confirm these references.)

• How do you arrive at your values? Do you have access to special libraries, relevant publications, current price indexes, and such?

• Will you document and support your opinion at a trial if necessary? Is there an extra fee for this? How much? (Think twice about hiring an appraiser who refuses to support an opinion.)

• May I see a sample appraisal report?

Tell the appraiser your specific needs, the item(s) to be appraised, and the purpose of the appraisal. Be sure your objectives are clarified so you receive a proper appraisal report.

Ethics

Appraisers must preserve the confidentiality of the subject matter, be objective, not charge excessive fees, and prepare clear, concise, and correct reports. It is unethical for an appraiser to accept an assignment and appraise an item in which he or she has an interest or contemplated interest in buying. Do not agree to a fee based on the value of the item; this may tempt the appraiser to overvalue an item to collect a higher fee.

Fees

Fees are usually determined by the type and purpose of the appraisal, the degree of difficulty, and the type of item appraised. Speak to several appraisers, and do not necessarily hire the one charging the lowest fee. Most good appraisers charge an hourly (from $35 to $150) or daily (from $350 to $1,500) fee. Expect to be charged for travel, research, and writing time. For large jobs, like an inventory of your home, appraisers often make a preliminary visit and, for a fee, give you an estimate of the entire cost. Try to get the appraiser to agree to deduct the estimate fee from the entire fee if you agree ultimately to hire him or her. Insist on a written contract or letter of agreement describing the arrangement (see Figures 4.3 and 4.4).

What Do You Get for Your Money?

The purpose of an appraisal is to establish rightful ownership of property, to identify the objects by describing their inherent characteristics, and to value the items based on the known comparable objects in the marketplace. You should receive two copies of the appraisal, listing each item. A full description of each piece will tell you, to the best of the appraiser's ability, the age, characteristics, physical condition, and, if significant, national origin. When the maker-company, craftsman, or artist is known, this will be included. Where pertinent, dimensions and silver weight will be stated.

Numbers or sets will be included. Finally, each item or group will be assigned a value appropriate to the purpose of the appraisal-insurance, private sale, estate sale, donation for tax purposes, and so on. The date of the appraisal, purpose of the appraisal, and the appraiser's signature must be present.

Do not accept a scribbled, handwritten appraisal with misspellings, scant listings, and inaccurate numbers. An appraisal report that states "6 dining room chairs-$1,200" is meaningless.

What You Should Not Expect to Get for Your Money

Do not expect to have every single piece of property in your house cataloged, researched, and authenticated. For $500 to $1,000 you should receive an accurate, concise appraisal of the few special or most valuable items.

If You Are Exploited

You can file a written complaint with the American Society of Appraisers if the appraiser you hired is a member. This may commence a grievance procedure before the ethics committee, which determines if there has been a violation of their code of ethics. If a violation is found, the member may be warned, suspended, or expelled. You can also file a complaint with the local BBB or department of consumer affairs. In addition, you can seek redress in a court of law. Gross negligence occurs when an appraisal is intentionally rendered false or made in reckless disregard for the true value of the object. In the case of an undervaluation, the monetary damage awarded is the difference between the fair market value and the purchase price of the item. In the case of over-valuation, damages are based on the difference between the purchase price and the fair market value (the salvage value or unauthentic value of the item).

Watch out for appraisers who attempt to disclaim their reports by stating that they are not competent in scientific analysis, and thus are not responsible for incorrect appraisals, errors or omissions due to failure to incorporate the scientific findings in the valuation.

An expert may try to obtain a covenant against liability in the appraisal contract. This clause is unethical-a professional owes a consumer the highest level of care. However, an appraiser may properly limit liability by stating that the valuation is for a particular purpose or person and/or is good for only a specific period of time.

Art Forgery

It is estimated that as much as 10 percent of all art sales involve a forgery of some kind. At the same time, risk of punishment or conviction for art forgery is comparatively small. A dealer can simply say that he or she was unaware that the object was a forgery at the time of the sale. Furthermore, forgery often can be proved only by expert opinion, and expert opinions are expensive, difficult to obtain, and frequently contradictory. In addition, since these experts are often art dealers, they are reluctant to risk losing customers.

The current popularity of prints has made them an attractive target for forgery. Jonathan was told that be bought an original print produced by an artist from a master plate of the artist's own design and approval and that it was a limited number. Personally signed by the artist. Unfortunately Jonathan purchased a print reproduction that was produced from a photo mechanical process (not requiring the supervision or knowledge of the artist). The forgery was so real that Jonathan paid a premium price for a "Signed" reproduction that was not part of a limited edition.

Methods

Forgery, the copying or alteration of a work of art for fraudulent purposes, is often classified according to the method of fabrication.

• Signatures are easily forged, either by adding the name of a famous artist to an unsigned work or by removing an existing signature and replacing it with that of a master.

• A forger can complete an unfinished work and sell it as an original masterpiece of the same time period.

• A forger can reproduce a specific masterpiece with the intent of selling the copy as the original work. Sculpture is easily forged by casting the original, thereby producing an exact replica. Prints can be forged easily when an artist falls to sign and number the work.

The buyer of antiquities must also exercise a degree of caution because the identification of ancient artists is often tenuous at best, and it is difficult to ascertain the chain of possession where an object is claimed to be freshly found. Similarly, the purchaser of ancient art should be suspicious in instances where a seller provides too detailed a description and representation regarding the origins of the object.

Methods of Detecting Art Forgery

There are essentially two methods of determining the authenticity of a work of art: connoisseurship and scientific analysis. A trained art connoisseur or art historian is well versed in the history of the period in which he or she is a specialist, and is experienced in handling original works of art.

Although the specific approach varies, an art historian will typically begin the process of authentication by comparing the piece in question with the accepted body of the artist's work. For instance, types of paper, paints, and materials may be significantly different. Details in the work such as wardrobe, jewelry, subject, hairstyle, architecture, or setting may postdate the supposed year of execution.

Then, various methods are used to determine the date of the materials used, the type of materials used, and the techniques implemented in producing the work. X-rays and similar tests are employed to examine layers of pigment and undercoatings, which in turn reveal the stages of artistic production as well as later alterations. X-rays, however, require expert analysis because although underpainting may be indicative of a forgery, it may also indicate restoration, an artist's dissatisfaction with his or her own work, or a desire to economize by reusing a discarded canvas.

Going, Going, Gone

When buying from dealers, shops, galleries, and shows, you have plenty of time to study an object and make up your mind. At an auction, there's less time for hesitation.

When attending an auction, particularly for the first time, it is a good idea not to make a bid until you learn the rules regarding how the auction is conducted. For example, how much of a deposit is requested after a purchase is made? Must the check be certified? What happens if you fail to pay the balance within the requested period of time-do you lose your deposit? These and many other conditions of conduct and sale should be spelled out in the contract between the customer and the auction house. Read it carefully before making a bid. The BBB suggests that abuses can be avoided by dealing only with reputable auction houses. Yet abuses occur in even the most reputable auction houses (i.e., one common scheme involves groups of people working for the house getting together to drive up the price of an object). Do not be drawn into paying more than you think an object is worth.

Attend the preview held before the sale. Purchase the catalog, then study the items on display and make notes in the catalog of their size, age, and condition. The catalog will give dollar estimates for, as well as descriptions of, the items for sale. Make a written list of what you really want and stick to it. Don't give in to auction fever. During the auction, write down what each item sells for and use the catalog as a guideline in the future.

Fine jewelry

Guidelines established by the FTC in cooperation with the jewelry industry state that the word gold, used by itself, means all gold or 24 karat (24K) gold. Because 24K gold is soft, it is usually mixed with metals that will increase its hardness and durability.

The "karat" marking tells what proportion of gold is mixed with the other metals. If 14 parts of gold are mixed with 10 parts of base metal, the combination is 14 karat (14K) gold. The higher the karat rating, the higher the proportion of gold in the object. The lowest karat gold that can be marketed as gold in the United States is 10 karat. Jewelry does not have to be marked with its karat quality, but most of it is. If there is a karat quality mark, next to it must be the U.S. registered trademark of the person or company that will stand behind the mark, as required by the National Gold and Silver Stamping Act.

"Plated," "gold-filled" (GF), "gold overlay," and "rolled gold plate" (RGP) describe jewelry that has a layer of at least 10 karat gold mechanically bonded to a base metal. If such jewelry is marked with one of the terms listed above, the term must follow the karat quality of the gold used (e.g., "14K Gold Overlay").

Jewelry marked "silver" or "sterling silver" must contain 92.5 percent silver under jewelry industry guidelines. The mark "coin silver" is used for alloys containing 90 percent silver.

Gemstones

To qualify as "gemstones," minerals must possess beauty (affected by color, transparency, and brilliance), which is brought out by cutting; durability (the stone's hardness and toughness); and rarity (taking into consideration size and quality). Some organic materials-including pearl, coral, amber, and 'et-are also used in 'jewelry.

Pearls

It takes years for an oyster to produce a fine, large pearl. The quality and value of pearls are determined by:

• lack of blemishes or spots

• roundness

• luster

• tint (Rose-tinted and silver pearls are the most valuable.)

• size (The larger the pearl, the greater the cost.)

A pearl necklace or any strung pearl item requires careful matching of size, roundness, luster, tint, and skin texture. Most pearls today are cultured; oysters are artificially stimulated to grow pearls. Basically, the same criteria for cultured and natural pearls determine value. But a pearl must be described as cultured or natural, and this should be stated on your bill of sale, since natural pearls are more costly than cultured pearls.

Some cultured pearls are dyed and made silver-blue or pinkish. Ask if the color is natural, and have the answer written in your receipt.

Synthetic (simulated or fake) pearls are sold everywhere, and good imitations have been mistaken for cultured pearls. Some people run the pearl gently between their teeth. The cultured or genuine pearl will have a mild abrasive feel; the imitation is often slippery smooth. When in doubt, seek the advice of a qualified gemologist.

Natural, Synthetic, and Imitation Stones

As their names indicate, natural stones are found in nature; synthetic stones are made in a laboratory. A synthetic or imitation stone cannot legally be offered for sale without disclosing that it is not natural. Similarly, a stone that does not have the same composition as the natural stone must be described as "imitation" or a similar word. In either case, you must be clearly informed if the stone is not natural.

Units of Measurement

Gemstones may be measured by weight, size, or both. The basic unit for weighing gemstones is the carat, which is equal to one-fifth of a gram. Carats are divided into 100 units, called "points." For example, a half-carat gemstone weighs.50 carats or 50 points. When gemstones are measured by size, this is expressed in millimeters. Pearls are expressed in millimeters because they usually are sold by diameter measurement,

Watches

If a watch costs $15 or more and comes with a written warranty, the law requires that the warranty be available to you prior to buying the product.

If you are considering an expensive watch, you may want to compare warranties as you compare prices.

Buying Fine jewelry and Watches

Before buying any special piece of 'jewelry, ask the salesperson some key questions.

• If the item has a stone, is it natural, synthetic, or imitation?

• What enhancement methods, if any, have been used?

• If the gemstone has been enhanced, is the change permanent?

• What special care is needed?

• Will the seller write on the sales slip any information on which you relied in making the purchase, such as the gem's weight or size? Some jewelers also supply a grading report from a gemological laboratory.

• Is a warranty or guarantee provided on the watch?

• Which watch parts and repair problems are covered by the warranty? Which are excluded? For example, some warranties may not cover replacement of a watch crystal or case.

• Who pays shipping costs if the watch must be returned for repair; you or the company?

• How long does the warranty last?

• Where can you get the watch repaired under the warranty?

• What will the company do if a watch falls or a chain breaks and it cannot be repaired? Will the company replace it or return your money?

• What are the conditions or limitations on the warranty? For example, some warranties may be limited to the first purchaser?

What to Do About Problems

Although the FTC won't intervene in individual disputes, it is still interested in hearing about problems that involve gold jewelry, gemstones, watches, or warranties. When sending complaints to the company, you can send copies of that correspondence to the Federal Trade Commission, Public Reference, Washington, D.C. 20580.