Questioning Valuation Comparable

from Bob Weinberg of Huntington, NY

I question “auction house prices” as being related to fair market value. Auction house purchases involve a substantial amount of risk above dealer purchases mostly relating to condition and authenticity. Live auction buyers are generally either looking for bargains or get out of control and pay more than they intend in the heat of bidding.

In recent months I have seen extravagant (way above retail dealer prices) paid for very popular items like name brand jewelry & Tiffany glass while at the same time prices paid at auction for really rare specialty items from a major collection were less than half of what they should have been because the auction house did a terrible job of protecting their seller and promoting the auction. I do think that if one works with long established eBay sellers (eBay and on-line sellers generally do a terrible job of eliminating fakes!) and asks sufficient questions, prices available on e-Bay are very reliable indicators of fair value.

What’s In A Value?

from John Styler of Prospect Heights, IL

I am on the board of another 501(c)(3) organization. We hold two major fundraisers a year.

I solicited a Jeweler for a donation and he gave me a watch valued at $875; price tag.
I went online and found the same one for $230; he takes the top price off his taxes; it
was in our silent auction and sold for $220.

Now that’s $220 we made thanks to him. Previously he donated diamond earrings with
a value of $1,000 and we made $455 on them.

We appreciate anything we can get; so much for FMV