Appraisal Value Versus Actual Worth With Collectibles

When dealing with guitars, antiques, or any collectible for that matter, there is a fine line between appraisal value and what the actual item is worth. The word "appraisal" gets thrown around quite a bit, and most of the time the "appraised" item in question has false perception tied to it.

There are many resources for appraisals, and seldom is there such a thing as a free appraisal. When you get an item appraised, you are being sold an appraisal. Appraisals are a service, and most of the time there is a fee for this service. That being said, this discussion in no way, shape, or form intends to discredit anyone who provides appraisal services.

There is a huge difference between appraisal value and actual market value. Let's use a 1960 "burst" Les Paul for example, say in 60% condition. There are resources out there, appraisers and price guides, that would consider this particular guitar to be worth upwards of $100,000. In actuality, this guitar could sell for $60,000. That's a 40% difference in price.

People can be misguided when it comes to appraisal price. If a luthier (or any appraiser) puts a $100,000 appraisal on said guitar, again, that's appraisal price, not market value. The guitar, again in 60% condition, most likely will not sell for the appraisal price, and the price realized will most likely be considerably less.

Most people with these appraisals seem to think that their items are worth the same amount liquid as they are appraised. Unfortunately, the market value of these items is almost always less than the appraisal. Think of an appraisal as an insurance policy. Let's say that you had a flood or a fire in your home and your guitar was destroyed or damaged beyond repair. If you were to provide a copy of that appraisal to your insurance company, that will most likely be the amount you will receive for replacement. When it comes to market value, these instruments simply don't sell for your appraisal value.

You can even do some research yourself. Say you have an old Fender Telecaster in fair shape with a $15,000 appraisal. Next, try to find a comparable guitar with the same specs, and see if you can find one that actually sold for your appraisal price. The outcome? You won't find one. There could always be a diamond in the rough that might sell for close to appraisal price, but most of the time it will sell for upwards of 40-50% less. That is the reality of appraisal value compared to market value.

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