Choosing Asking Prices for Replacement Costs
Monday, November 16, 2020 in Ask an Instructor
Question: A fine art print from the same print edition can often be found in multiple retail galleries with a range of different asking prices. How do I choose which asking price to use for replacement cost? Does the condition of the client’s print play a role in the selection of the comparable?
Answer: I’m going to answer the second question first. Yes! Condition always matters. The selection of appropriate comparables is greatly dependent on how similar the comparable work is to the work being appraised. Condition is a major factor of value, thus it is a major factor in choosing the right comparable. Now to answer the first question. If there are multiple galleries that have the same item, then the best practice is to ask your client where do they shop. Remember that the goal of insurance is to make the client whole should there be a loss. Thus, the replacement cost should be appropriate for the sale venue where your client would go to replace the work.