Thursday, September 22, 2016

Oriental Rugs: The Myths, the Market, and More

By Ellen Amirkhan, ISA CAPP

Whether they are made by hand or machine, valuing rugs is one of the most daunting appraisal specialties. Winston Churchill’s description of the former Soviet Union, “a riddle wrapped in a mystery inside an enigma,” also serves as an apt way of depicting the world of Oriental rugs. In the last 25 years, during which I’ve taught a number of rug appraisal courses, I’ve determined that the goal of the class is to give the student the tools and skills to measure, analyze, photograph and document rugs using proper techniques and terminology.

A springboard to self-study, November’s Oriental Rugs course focuses on terminology, components of identification, photography, commonly encountered rugs, factors affecting value, and finding the appropriate comparables. The class is held in “The Casbah,” a classroom in a 100+ year-old oriental rug cleaning plant in Dallas, Texas, providing those in attendance with hands-on access to over 300 rugs. 

But while I have you here, let’s dispel a few myths about oriental rugs, shall we?

Myth # 1: All oriental rugs appreciate in value.
Answer: Neither post-World War II rugs nor most new rugs being purchased today will appreciate in value. Consumers most likely paid more for some rugs in the ‘50s, ‘60s, ‘70s and ‘80s than they are worth today. Most rugs today are made to satisfy current design trends. When these trends in color, design and texture go out of style, the value of the rug will depreciate. 

Examples: 
(a) Pastel Kirmans of the ‘50s and ‘60s are coming into the secondary market as their owners are downsized or become deceased. These rugs, which were expensive and “choice” 50+ years ago, cannot even be given away today.

(b) Today, Turkish Oushaks are decoratively hot. However, they were loosely woven and their condition may be fragile. I tell my clients that even though they paid a high price for this rug, the value will plummet as styles change.

(c) Expensive luxury cars such as BMW, Mercedes, and Jaguar depreciate the moment they are driven off the showroom floor. This depreciation does not mean that the vehicles are not worthy of the price. The same applies to most contemporary and trendy oriental rugs. 

Myth # 2: All old Oriental rugs are worth a lot.
Answer: Condition is important when determining value. For instance, an old rug in poor condition is just an old rug. An old rug in good condition may not be worth much if it lacks artistic merit (i.e. bad colors). Many old rugs with artistic merit are worth repairing, as they are decorative and functional.

Myth # 3: Persian (Iranian) rugs are better than rugs from other countries.
Answer: Many pre-World War II Persian rugs such as Ferahan Sarouk, Kashan, Heriz, Tabriz, Bijar, tribal pieces and other noteworthy examples will always have a market, albeit a small one, if they are in good condition and have artistic merit. Since the fall of the Shah in 1979, along with the embargo on Persian goods (1987-1999 and 2010-2016), other countries improved the quality and increased the production of rugs that changed with design trends. The quality of Persian rugs has gradually deteriorated since the 1960s, and they have not kept pace with modern tastes. Today, there is limited production of high quality, natural dyed rugs that are worthy of their ancestors’ reputation. They have a lot of catching up to do. 

Myth # 4: Knot count is the best indication of value.
Answer: The value of only a few traditional Persian rugs is determined by knot count, and even then only partially. Two that come to mind are Nain and Isfahan. The value of silk rugs is largely determined by knot count and country of origin. The value of most older, traditional Persian rugs is based on condition, rarity, and artistic merit. Heriz and Mahal rugs have a lower knot count and used to be some of the most expensive rugs in the decorative market. Generally speaking, the price of new rugs is based on knot count and quality of materials. Once these mass produced rugs are used, their value in the secondary market is not based on knot count but rather condition and artistic merit.

Myth # 5: Oriental rugs are identified by their design.
Answer: Design is only one component of identification. Rugs are best identified by their construction. Some of the components of identification are materials used, type of knot, number and color of wefts between each row of knots, design, size, and end and side finishes. When a ‘rug person’ walks up and kicks over the corner of a rug, he or she is looking at the construction on the back of the rug. 

Myth # 6: Never clean or vacuum Oriental rugs.
Answer: 80% of soil in rugs is dry, particulate matter. It acts as sandpaper and wears the rug out. Some rugs are so thick, they do not appear to be soiled, when in fact the soil is so embedded that it is impossible to remove all of it. Beware of anyone selling rugs that say they should never be cleaned.  What they may really mean is the rug will not withstand proper cleaning due to condition, foundation painting, or other hidden defects.

There is perhaps no other subject for the generalist personal property appraiser that is filled with so many myths, misconceptions and downright nonsense! Like the guy who told me his rug was over 1000 years old and trampled by camels. (Really?!)

Some of My Favorite Stories:
1.  My rug has a twin and it’s in the Smithsonian.
2.  The Shah owned it/walked on it/gave it to my husband’s second cousin twice-removed.
3.  You can tell my rug was woven by a mother and daughter because one side is better than the other.
4.  I’m going to send the appraiser to Iran to find the weaver.
5.  The rug was repaired with yarns from its village of origin from sheep that grazed on the west side of the mountain.
6.  He thought he bought a Navajo rug from Ikea but it was a dhurrie from India.
7.  It’s one-of-a-kind, they’ve never seen it before and it’s a sculpted 90 Line Chinese from the 1980s.
8.  The rug has a label “Made in Pakistan” and they swear it’s over 100 years old.
9.  The man spent $10,000 in Turkey for what he was told was an antique Turkish silk Hereke… and it was actually modern, rayon, worth $2500.00, and made in China.
10.  My rug is “signed” and is worth more:  the inscription reads “Good Luck”.

We hope you’ll join us in class, November 10 and 11, for the Oriental Rugs course. We hope you bring some ‘favorite stories’ of your own!

Wednesday, September 14, 2016

The Clarion List, Our Newest Affinity Business Partner

We're always incredibly excited to welcome a new company into the fold as an ISA Affinity Business Partner (ABP), and in the case of The Clarion List, this addition to the ABP family comes with a special offer to ISA members!

The Clarion List is the leading online resource for sourcing art service companies. Their searchable, sortable, free database with ratings and reviews includes 6000+ art companies in the US and Europe across dozens of service categories. It is Clarion's hope that that your potential clients find them a helpful resource when you need to source new art service providers both at home and in new markets, like storage companies, transport firms, installers, framers, lenders, insurance brokers, law firms, conservators, security firms, risk consultants, collection software, lighting companies and more.

And, just as importantly, they want their audience to find YOU when in need of an art appraiser. They have partnered with the ISA to offer a discount on their premium packages, enabling you to optimize your listing with more information, add your logo and other images, and increase your chances for lead generation. Premium listers will also be able to add the ISA logo to their listing, which will display in search results and on your individual listing, enabling their audience to understand your qualification at a glance.

The ISA badge on your Clarion enhanced listing serves to not only help you stand out on the website but to also grow the public's awareness of ISA credentials as an important distinction when choosing an appraiser.

Next Steps:
  • Claim your free listing - do a keyword search for your company name or search for your listing with our List of Appraisers, then click “Claim This Listing”

  • Not listed? Contact Clarion.

  • Edit your basic listing information.

  • Consider one of their brand-building premium plans, starting at just $20/month. Details: clarionlist.com/learnmore

  • Enter code ISA30 before checkout to receive 30% off either plan
Take advantage of this special offer today from The Clarion List, our newest ABP.

Thursday, September 8, 2016

ASK AN INSTRUCTOR: Is ISA still using the term critical assumptions?

ISA members are invited to send in their questions on all things appraising and education to ISA's instructors. One of ISA's instructors will share answers on the ISA Now Blog. Please send questions to directorofeducation@isa-appraisers.org.

Question:
Is ISA still using the term critical assumptions? I thought I read it in one of the education updates or blog posts that it has been substituted with different terminology.

Answer: We have switched to using the term extraordinary assumptions, since that’s the USPAP term, but the term critical assumptions is still acceptable. (I usually use both terms and put one in parenthesis.)

Question:
Could you clarify about identifying the client? For example, if a lawyer calls me about an estate appraisal, is he my client or the heir that meets me at the house?

Answer: According to USPAP, the client is the party or parties who engage the client, by employment or contract, an appraiser in a specific assignment. The attorney may be acting as an agent only. The client is the one who signs the agreement. If the lawyer signs the contract, then they are the client.

Thursday, September 1, 2016

Moving On Up With Education

By Libby Holloway, ISA CAPP and ARC Instructor

September is ISA’s back to school time. All three of our week long foundation courses, Core Course, Appraisal of Antiques and Residential Contents (ARC) and Appraisal of Fine Art (FA) are offered in the next few months. Shorter courses to include the 15 Hour and 7 Hour USPAP, Requalification and Oriental Rugs are also offered before this year’s end. The Foundation for Appraisal Education (FAE) even gets in the game with their upcoming Symposium in Philadelphia. There are lots of opportunities to make sure you are up-to-date with your qualifications and educational goals between now and mid-December. 

All members know that the Core Course and 15 Hour USPAP are required courses. After these are under your belt, you get a little freedom to choose your educational path and how you get your Professional Development Credits. (Don’t forget, Members need 50, AMs need 75, CAPPs need 100 and Lifetime members need 50 credits to renew.) It is also worthwhile to take a look at the ISA Credentialing Pathway, which provides an overview of the steps you can take to further your education.

It has been traditional to take the course that fits with your specialty area, which is certainly a good plan. Don’t forget, though, that most appraisers see many types of property onsite and need to know the basics of identification and description, whether they plan to complete the valuation or seek help from another member or specialist. Appraisers are also held accountable to appraise only that property they are competent to appraise (see USPAP).

The Appraisal of Antiques and Residential Contents (ARC) and Appraisal of Fine Art (FA) courses are great steps toward becoming an Accredited or Certified Member. Both are survey courses which offer a broad spectrum of knowledge to help appraisers understand at least a little about a lot of types of property. Survey courses don’t make you an expert on any subject but do give you a view of “good, better and best” for many types of property.

Both also teach you the language to use in writing descriptions, to identify and research the best comparable property, give tips on how to write USPAP compliant reports and prepare you to take other, more specialized courses. Since these are onsite courses, you have a chance to study with other members, learning from each other as well as the instructors. I have received help from both members I took ARC with sixteen years ago and from my students who took the course last fall. I admit to being a particular fan of the ARC class, which features lessons on lighting, oriental carpets, and everything in-between. (Maybe I’m a little biased.)  

I have been a CAPP member for several years now and have recently become an ARC instructor. I think I have a pretty good understanding of most decorative antiques and household property. This year, I have finally gathered up enough courage to take the Fine Art course in October. Though I have been comfortable including lower-value art in my reports, I have found that my lack of knowledge has potentially motivated me to turn down jobs with more complicated pieces included. I know that, with my background, I will not be competent to value all art.

That said, it will certainly allow me to be more confident when seeking help from more experienced fine art appraisers or specialists. I would even encourage those members with higher education who are pursuing the Specialty Studies path to consider taking one or both of the survey courses.

We often boast that ISA trains many of the most well-rounded and competent appraisers in the profession. The ARC and FA courses certainly play a part in making this true. I hope that you choose to join Michael Logan and myself in the ARC class this October. See you there!