ASK AN INSTRUCTOR: What is a reasonable formula to help create an inventory in the estate of a noted historian?

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Question: I am working on an inventory in the estate of a noted historian. He’s well known in certain circles, but not a household name. What is a reasonable formula to assist in this area?

Answer: You ask a difficult and repeated question from many members, i.e. regarding what role ownership plays in determining value. The notoriety or celebrity status of ownership does play an important role in determining value since it is a value characteristic of an item. Unfortunately, there is no formula or set method I can suggest that would provide a quick and easy answer. However, I do have some guidelines that might be useful.

1. Ownership must be viewed in both a short term and long term perspective. Short-term perspective is based on current fads and pop culture. It may affect the value significantly, but is apt to drop rapidly depending on the fortunes and tastes of the fickle public. If Michael Jackson owned a sofa, the value at the time of his death might be considerably more than it is right now. A sofa owned by Elvis might not have peaked. In the long term, one looks for a traditional historical or cultural significance of the owner, i.e. if George Washington owned or sat on it. These examples are much easier to substantiate and document with parallel comparables.
2. The object’s value is proportional to the relationship it might have to the owner’s notoriety or reputation. For example, a cigar humidor owned by George Burns, the well-known cigar smoking comedian, would be worth more than a humidor owned by another celebrity since it doesn’t have that symbiotic relationship. A chair owned by Joan Rivers that sat in her guest room will not have the same value as one she used constantly while hawking her jewelry on QVC. It could be the same chair, but the emotional ties are not present.
3. Notoriety may be select and difficult to market, unless there is an attempt to promote and eulogize to the public. Al Capone’s cocktail shaker sold by Leslie Hindman years ago brought in more than ten times any other shaker would have brought, partially, if not completely, based on the fact that she made a fanciful and very successful effort to publicize the sale, even having all the auction staff wear “gangster” clothing to the preview. Since as appraisers we do not often know if there will even be an attempt to promote and “embroider” the objects, we must be more objective and value them in light of what is currently known and recorded.
4. One of the tests an appraiser must consider is the “highest and best use” of the goods. Although I am not suggesting every single item has another employment that might result in a higher value, it often is worth the time and effort to consider it. USPAP states in Standard 8-2-a-ix that “value can be a function of the current and alternate use of the subject property, the choice of the appropriate market or market level for the type of item, the type and definition of value, and intended use of the report.” What if you had to appraise the Jackie Onassis estate? What would you have done with the strand of costume pearls? I doubt you would have appraised them at over $75,000, unless you were aware that they might be considered a “prop” in an advertising campaign to sell reproductions of the strand.
5. The public can be both more savvy or less discriminating at any given moment. Short-term fads have a way of become even shorter. I would be very cautious of using overnight recognition to base serious value conclusions. On the other hand, narrow areas of knowledge have blossomed in the past few years, and science (scientists) and history (historians) are two of those areas. Part of that comes from the amazing sale results of Nobel prizes and related archives and material owned by prominent and respected world leaders in their respective fields. You are right in considering the fact that a well-known historian’s objects may have added value.

I once appraised the household goods of a “famous” couple who were part of the “housewives of …” television series. They were declaring bankruptcy and the court ordered a bankruptcy appraisal to learn the forced sale value of their assets. The items were appraised based on similar sales of contemporary household goods and accessories in bankruptcy situations. The appraisal was sent in and an auctioneer was chosen to hold the auction. Since even bankruptcy auctioneers have discovered the potency of the Internet, they listed the upcoming sale on their website. In the first 24 hours, they had over a million hits! The trustee called and questioned whether this might be a bigger event with higher prices than anyone had imagined. We decided to write a letter to the court suggesting that the marketing and publicity of the case might alter the outcome and raise the potential proceeds much more than the original values given in the appraisal. To make a long story short, the sale never occurred.

If I could only provide a handy formula, I would probably become the toast of the town (the appraisal town), plus I might get a shot at a few late night talk shows. It certainly would make a good book! (Not a bad idea.) Too bad it just doesn’t work that way.