Saturday, March 21, 2009

Valuing Your Quilts

Valuing Your Quilt


The purpose of this article is to provide a brief summary on:
1. Estimating the “monetary value” of a quilt, and
2. Identifying “criteria” that contribute to the appraisal of a quilt.

The quilt library catalogs are filled with documents to assist quilters with placing a “monetary value” on their quilt. In order to begin this process, the quilter must know and decide the answer to one important question: “For what purpose am I placing a value on this quilt?” This single question provides the foundation for the value placed on a quilt.

In addition to this most basic question, the quilter must also consider other questions such as: Are you entering your quilt in a show or contest? Are you an art quilter selling a piece to a corporation? Are you a quilt collector donating a single quilt or a collection of quilts to a museum and want to take a tax deduction? Do you want to give family treasures to your children?*

What is the “monetary value” of a Quilt?

In her article on “Setting a Value for a Quilt”, Nancy Kirk identifies five basic criteria for determining the value of a quilt: 1) Design, 2) Condition, 3) Workmanship, 4) Historical Interest, and 5) Age. The monetary value of a quilt is what that quilt will command in the marketplace as determined by sales prices of quilts of similar age, quality and condition. The monetary value is greatly determined by the combination of basic criteria and the personal value that purchases places the quilt.

There are five basic values for a quilt:

Sentimental Value is the value an owner places on a quilt because of family connections, memories and personal experience with the quilt. For a collector, this is often the most important value, but it is not a factor in determining monetary worth either for resale or for insurance.

Insurance Value is the amount the owner should insure the quilt for in case of loss, in order to replace it with a quilt of similar age, condition and quality. The replacement is usually figured as the cost of another similar quilt, but in some circumstances may include the cost of re-creating the quilt with like materials and workmanship. In some cases, insurance value may exceed fair market value. Many insurance companies require a written appraisal before accepting quilts as "scheduled property" on personal insurance policies. If the quilt was purchased, receipts should be maintained to establish worth, and appraisals over time will be needed to establish any increase in value. Sentimental value is not considered by insurance claims adjustors in determining the amount of a loss.

Fair Market Value is the amount a willing buyer will pay a willing seller for this quilt within a reasonable period of time and within a reasonable geographic area. Fair market values are determined by recent sales prices of quilts of similar age, quality and condition in the local marketplace. It does not take into account the replacement cost, or sentimental value of the quilt. It also does not take into account extraordinary marketing circumstances such as prices the quilt could command at an international quilt show with thousands of buyers present. Fair Market Value is a legal definition used by the I.R.S. in determining the tax-deductibility of donations to qualified non-profit organizations, or for valuing an estate. Fair market values may vary somewhat by geographic location, and can change due to current market trends.

Retail Value is the amount a dealer will sell a quilt for. The price could be slightly higher or lower than fair market value depending on the marketing plan -- internet sale, auction sale, quilt show, location of shop etc. Generally retail prices are higher in major metropolitan areas because of the cost of overhead, and auction prices can be skewed if family and friends are bidding using sentimental value as a guide.

Wholesale Value is the amount a professional dealer will pay for the quilt. You can generally expect this to be approximately half of the retail value.

Who determines the “monetary value” of a Quilt?

The monetary value of a quilt may be determined by a professional Quilt appraiser. But again, it depends upon the reason a Quilter seeks to place a monetary value on their quilt.

What is an appraisal?

An appraisal is a documented methodology for placing value on a Quilt (commodity). There are three common types of appraisals:

1. Insurance/Replacement Value: According to Terry King, Chairman of the International Personal Property Committee of the American Society of Appraisers, "[a]n insurance appraisal should actually describe what the appraiser found in the marketplace that would satisfy the loss of your [quilt], for example. It does not reflect what you could get for that particular [quilt], but rather what you would pay to acquire another one.

2. Fair Market Value: This is, according to both Wiener and King, is a "legal construct." King explains that fair market value "is used in the courts to settle disputes and is an ideal, or perfect-world, value. It assures that you and the government can get a fair shake." It is the fair market value that, according to Karen Carolan, chief of art advisory services at the Internal Revenue Service and chair of the ARS Art Advisory Panel, "is the one and only value that we use for evaluating charitable gifts and for determining estate/gift taxes." The IRS tax code states: "The fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts."

3. Equitable Distribution Value: This dollar evaluation is the type of appraisal that you would need if you were looking to divide up assets -- perhaps during the dissolution of a marriage (article by Ruth Katz, Colonial Homes, April 1996, p. 29).

Why get your Quilt Appraised?

Among the many purposes requiring appraisals for quilts and other objects are insurance, charitable donation for which a tax deduction can be claimed, estate tax, gift tax, equitable distribution in divorce, or liquidation.

Each of these purposes may require a different type of value such as replacement value, fair market value, marketable cash value, or liquidation value. Legal requirements vary about what each type of appraisal should contain. Every object in the world has a large array of different values for different purposes.

How do you “price” your Quilts for Resale?

Values are determined by the marketplace. Now, this statement is “nebulous”. What are the nuts and bolts? How do you price a quilt for retail sale? Below is a practical approach to pricing your quilt for retail sale.

Approach: Price by the square foot. You should develop different prices per square foot depending upon the complexity of the quilt blocks and style used to develop the quilt top.

How do you decide what your square foot price will be?

Step 1: Keep track of your time on when making at least one quilt. This would include time spent in preparation, designing the quilt, preparing the pattern, piecing, and quilting, basting and binding. Include preparation time such as selecting fabric, preparing the fabric, cutting the blocks, etc.

Step 2: Add up the number of hours you took to make the quilt and then divide the number of hours by the number of square feet in your quilt. That's how long it takes to make one square foot of quilt.

Step 3: Place a value on the use of your time as an experienced quilter, textile artist, fiber artist, etc. The value of your time should be placed between $20 - $40 per hour.

Step 4: Multiply your hourly rate by the number of hours it takes to make a quilt. A 100” X 100” quilt is 10 square feet. If you took 50 hours to make this quilt at a base hourly rate of $25 per hour, the monetary value of this quilt to the Quilter is $1,250 (50 hrs X $25).

What you need to be paid for the quilt is your monetary value. If you plan to place your quilt in a gallery, then your quilt price must include the gallery “mark up” – 10% - 25% over your retail sale price.
References Articles

American Quilt Collections, Antique Quilt Masterpieces (published by Nihon Vogue in both Japanese and English in Spring of 1997),
American Quilt Collections guide to the types of quilts and services that are available

Online tour of exhibition "Quilt Masterpieces from Folk Art to Fine Art."
PBS - Quilts Resources include links to museums, organizations; great glossary.

Quilt History Wealth of information including dating, cleaning, restoration, more.
The Quilt Index Display of quilts. The search by category-style, time period, and function-feature is extremely helpful.

Pricing Your Quilt