Fetching data by phone on what your art may fetch at auction
Barden Prisant and his mother, Carol, of Garden City, Long Island, have devised a computerized appraisal system that allows individuals to receive valuations of works of art over the telephone. Their computer contains more than 600,000 listings of auction sales over the past five years for the works of some 68,000 painters, sculptors, and printmakers.
Mr. Prisant came up with the idea for Telepraisal in 1982, while he was a senior at Yale University, where he received a bachelor of arts degree in art history. At that point, he began programming a computer to hold a vast array of information based on art auction sales.
Now when someone calls about a work of art, Prisant punches into his terminal the owner's description of its size, subject matter, whether it is signed or initialed, the medium, and whether it is framed or matted. The computer then identifies the more recent auction sales of the artist.
From there, a likely value for the work, based on the various descriptions, is arrived at by comparing the work in question with others like it that have been sold at auction. Prisant's service is modestly priced -- $30 when a price can be determined, $15 when no auction records are available -- and payable only by credit card. Although the service -- has been criticized by appraisers for putting values on works that neither Prisant nor his mother have seen, Telepraisal has been used by about 4,500 individuals, corporations, insurance companies, art dealers, and even agents of the Internal Revenue Service over the past three years.
Some clients want to buy a particular work and don't know whether the price is justified; others have inherited something and don't know what to sell it for; and still others seek to donate a work to a museum but are unsure of its value.
``I probably use Telepraisal five or six times a year,'' says Sibley Kopmeyer, an art and antiques dealer in Houston. ``Houston is a big city, and we have a very good library, but I find I can get more accurate and up-to-date information in a shorter period of time for not all that much money by calling Telepraisal. Ninety percent of the time I have very good luck with them.''
Telepraisal's approach is very much in keeping with the federal government's increasing desire to base appraisals on hard, factual evidence -- with actual documentation, such as auction sale records -- rather than on subjective reactions.
Over the years, Congress has shown more and more impatience with the entire appraisal process. Both the 1981 and 1984 tax reform acts greatly stiffened the penalties for what the IRS deems grossly faulty appraisals, and these penalties apply both to the owners of the objects and the appraisers themselves.
As it stands, the individual who gives an object to a nonprofit institution is required to pay a penalty of 30 percent of the tax underpayment if the appraised value of the object is found by the IRS to be off by 150 percent or more. This is in addition to the payment of the additional tax and interest on that amount. The guilty appraiser would also be subject to fines and a possible lawsuit from the donor, and would be barred from ever again submitting an appraisal for tax purposes.
One who makes a donation to a nonprofit institution is now also required to include a valid appraisal of the work on his or her tax returns if the object is either a work of art valued at $5,000 or more or if it is a closely held stock valued over $10,000.
More than 7 million taxpayers reported gifts of art objects or property to nonprofit institutions in 1982 (the last year for which complete records are available), totaling $4.5 billion. The stakes are high, and Congress has been increasingly alert to potential abuses.
Although an estimated 125,000 people are engaged either part- or full-time as appraisers, Telepraisal is the only appraiser that does its work exclusively via computer. It is certainly one of the least expensive companies in the field, where most appraisers work on an hourly rate, and charge between $40 and $125 an hour. Auction houses will provide free estimates of works, and even send appraisers out to someone's home to examine objects, but only if the works are ultimately sold through them. Otherwise, there is a charge.
The research conducted at Telepraisal has less to do with appraising a given work of art than with providing a possibly relevant price history of similar works by the same artist. Most of Prisant's clients are simply looking for a range of values for works, though occasionally he is asked to submit actual appraisals for donors of artworks to museums.
For the most part, he never actually sees the specific works and must take his clients' word as to their authenticity, condition, and medium. Not actually seeing the work is the fly in the ointment here. A client may not know whether a picture is, for instance, an original print or a reproduction torn out of a book. Prisant's written documentation includes a disclaimer that the valuation ``is based only on the readily apparent identity of the item(s). . . .''
Prisant may choose to appraise a work based on a photograph of it, but the condition of the work and its authorship -- the two most crucial elements in determining the value of any art object -- are outside his field of activity.
``Doing a good appraisal is a lot more than just looking up a price in a book, or in a computer,'' says Deborah Hearn, manager of Sotheby's appraisal department in New York. ``Putting a price on a picture is a subjective thing which requires looking at the work and knowing what you're seeing.''
Frank Davis, president of the Boston-based New England Appraisers Association, to which Prisant belongs, also stresses the importance of determining the authenticity and condition of a work.
``You have to start with the actual object,'' he says. ``You can't appraise a work by looking at a photograph of it.''
But Jeffrey Schutzman, manager of the valuation group in the New York City IRS office, says the government has no objections to basing appraisals on photographs. ``We can't look at all the objects which we receive appraisals for, because there are so many,'' Mr. Schutzman says. ``We, too, have to rely on photographs and on written reports.''