There are two basic types of appraisals: Fair Market Value and
Insurance Replacement Value.
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
(IRS Guidelines) This value is researched for musical instruments
that are to be sold, given to a non-profit institution, for estate evaluations,
and for legal proceedings.
Insurance Replacement Value is " The highest price in terms of
cash or other precisely revealed terms that would be required to replace a
property with another of similar age, quality, origin, appearance, provenance
and condition, within a reasonable length of time in an appropriate and
relevant market. This definition includes various anticipated costs such as:
purchase from an appropriate dealer purchase at a well publicized public
auction where comparable property is regularly sold and engagement of a commissionaire
or any other consultant." (American Society of Appraisers definition) This
value is researched for musical instruments that require an insurance appraisal
or have to be replaced.