(The following is an edited excerpt from Warp, Weft & Weave: A Life Collecting and Investing in Handmade Oriental Rugs by Sam Ramazani)
There are different reasons to have an appraisal of your oriental rugs done, and there are different kinds of appraisals. Taking a look at these will help understand when and how to use professional appraisers.
The first kind of appraisal is a casual appraisal. In my book, I talk a lot about the need to build a trusting relationship with a good dealer. A serious collector realizes that this relationship is the most important tool in creating a collection. A trusted dealer can be the first “appraisal” for a potential rug purchase. This kind of dealer will do two things; their rugs will be fairly priced and they will also give you an honest opinion on the price of a rug from another dealer. In addition to allowing clients to take rugs home to see how they fit in a space, a good dealer you buy from regularly will give an opinion of any rug’s value, free of charge. At Sara’s Oriental Rugs we will always give a professional opinion to any client, as the correct market retail price of a rug, no matter where the rug comes from.
Another kind of appraisal is the kind done for insurance purposes. This kind of appraisal will involve a report done by a certified appraiser, which will detail numerous things about the rug, including country of origin, age or estimated age, construction, weave, pattern, damage and many other things. All of this information is interesting and can be valuable to the owner of the rug, but the most important part of the report is the appraised retail value of the rug. Proper insurance will cover this retail value if anything happens to the rug, flood, fire, theft, etc. This kind of appraisal is usually a paid service, and likely can be done by your regular dealer.
Another instance an “official” appraisal that might be needed is during the liquidation of an estate. When there are many heirs to an estate, sometimes one or more heirs will want the rugs in the estate. Just as a house in an estate is appraised to split the value between heirs, valuable rugs will be appraised in the same way. This will also require a professional assessment of the collection, properly documented in detail.
Assessing Your Net Worth (and Appeasing Your Curiosity)
Yet another kind of appraisal that can be done is for your own inventory to value your collection for yourself and be able to add a numeric value to your net worth statement. This might be done in a few ways. If reflecting as large an amount as possible on your personal balance sheet is the goal, an insurance type of appraisal done on all your rugs and using that full retail price to value your collection will be the way to go. If, on the other hand you, are looking to realistically assess what you own – or in other words, what your rugs might actually bring if you sell them – the more casual kind of appraisal would work better, as it will produce a lower, more realistic market price for your rugs. Again, this underscores the importance of having a good relationship with a dealer. Often a dealer will do this for you for no charge, particularly if you are regularly buying and exchanging rugs. Most dealers who love what they do are happy to “talk shop” about the market and how rugs are selling at any given time. Most will be delighted to let you know what they think your rugs will sell for, especially if they are the dealer who sold it to you.