Stan,
Below are a couple of good posts on this subject from Steve Brady and
Larry Fine from a few years ago. I'm going ahead and posting it to the list
because some of the newer techs (and maybe others) might be interested. If
you're not, go ahead and delete. Sorry about the length.
Avery
>I am preparing to assess a 1969 Steinway 'B' for a new client and would
>appreciate some advice on arriving at a reasonable value for this
>instrument. Winnipeg is not exactly a hotbed of high-end piano sales but
>this client will be moving to Florida shortly and has already made some
>contacts there who are interested in the piano.
>
>My usual approach in these cases, which I understand is shared by some of
>you, is to first of all assess the deterioration in the instrument, assign
>a value to restore it to 'original' condition and then subtract that figure
>from it's optimum value. However, what is the 'optimum value' of a 29 year
>old B?
>
>I have had some success in similar situations by taking the value of a new
>instrument and then reducing that figure by approximately 5% per year in
>order to arrive at a ballpark 'optimum value'. What do B's sell for new?
>Are there 'hot' markets where the same piano would sell at premium pricing?
>
>By the way, this client tells me that the piano has been inscribed by both
>Oscar Peterson and Henry Steinway.
>
>Any advice?
>
>Regards,
>
>Stan Kroeker
>Registered Piano Technician
>
>Kroeker & Sons Piano Experts
>59 Quiring
>Winnipeg, Manitoba
>Canada R2G 1Y5
>
>Ph. 204-669-5881
============================================================================
Date: Wed, 20 Sep 1995 13:37:58 -0700 (PDT)
From: "S. Brady" <sbrady@u.washington.edu>
To: pianotech@byu.edu
Subject: Re: Appraisal
On Wed, 20 Sep 1995, Bob Simmons wrote:
> Admittedly, I'm insecure on doing appraisals. I have a client wanting to
>donate a Baldwin 'M' (1940) to a museum and I'm struggling with fixing a
>value. Would some of you mind looking over my shoulder and checking my
>work?
>
> The new price of a Baldwin 'M' is $19,722.
> Assuming a life-expectancy of 75 years, the depreciation schedule would
>be $262.96 per year, making the present value (with 20 years remaining):
>$5,259.20, if everything was in excellent condition.
Actually, Bob, most depreciation schedules assume *average* or
*normal* wear and tear, not *excellent* condition. So, in this case, the
appraised value by the "depreciation" method would be $5259.20. However,
it would be advisable to try a couple of other methods and to consider
the results together with this method, which has definite limitations due to
its assumptions about average wear and tear.
Another method I like quite a lot is called the "Idealized Value
Minus Costs" method. To use this procedure, assign an idealized value to
the instrument (what it would be worth if completely rebuilt). Many
people feel that this idealized value would be about 80% of the cost of a
new one. That would be 80% of *actual* new cost, not *list price.* Once
you've arrived at this idealized value, you do an estimate of what it would
take to make the piano like new, but also considering remaining
life on the existing components. Deduct this amount from the idealized
value, and you have an appraised valuation *by this method.*
A third common method of appraisal is to survey the piano market
*in your area* and find examples of similar pianos in similar age and
condition selling recently. Find out what they sold for and see if there
is some kind of trend. Good practice would dictate finding at least three
recent examples. This "current market value" method is the best
of the appraisal methods for determining what the piano would actually sell
for in your market area. One problem (for many of us) with using this method
is the possible difficulty of finding the data on recent sales. If you have
a friend who is a dealer or who buys and sells pianos, a consultation would
definitely be in order, because they would have the recent experience to
draw upon.
Appraising is an inexact science at best. To quote Don Galt, the
best we can do is to have a "rational approach" to assigning a value to
an instrument. If we can use two or three different rational approaches
and then either average them or at least consider them together, we can
achieve satisfactory, consistent results.
Ward Guthrie, RPT will be publishing a two-part article on
appraisals and estimates in the November and December issues of the Journal.
Good luck!
Steve Brady, RPT "The most expert and rapid tuners are...
University of Washington possessed of a highly excitable,
sbrady@u.washington.edu nervous, and emotional temperament,
verging on the border of insanity at times."
-Daniel Spillane, The Tuner's Guide
AND:
Date: Wed, 20 Sep 1995 18:24:44 -0400
From: PianoBook@aol.com
Dear Bob:
Ultimately a piano is worth what someone will pay for it, so in the
absence of an ability to actually put it on the market and see what it
fetches, or to see what many other 1940 Baldwin M's are fetching, we
must use a system that will approximate as close as possible that
condition. Steve Brady's depreciation schedule in The Piano Book was
designed to do just that and works well (in our experience) for pianos
in average condition for their age, especially for those models still in
production. Since you said the piano was okay as is, I am assuming it
could be said to be in average condition for its age, despite the fact
that it would cost thousands to satisfy the client. (If not, you will
have to adjust the value downward.) The schedule says that a
55-year-old grand is worth 30 percent of the value of a new one.
Note: This depreciation schedule is based on the *current* cost of a
new piano, not the *original* cost of the piano when it was new, so it
takes inflation into account. Since you said the current cost of a new
one is $19,722, the value of your piano would be just under $6,000. The
$19,722 figure is a list price for a new mahogany M, however, and in
actuality, you could probably get one for closer to $15,000 if you
bargained a little. So a more realistic market value for the used one
would be 30 percent of that, or $4,500, which accords better with my
experience than the higher price. But, assuming that your client wants
as high an appraised value as possible for use as a tax deduction, you
could justify the higher figure by the method described, using the list
price as the current new value.
This is not a foolproof way of appraising a piano, and you have to look
to your gut instincts and experience to make sure the figure you come up
with is credible (as you did), but it's a reasonable approach that, in
my experience, seems to come pretty close to what the piano would
actually sell for.
Larry Fine
___________________________
Avery Todd, RPT
Moores School of Music
University of Houston
Houston, TX 77204-4893
713-743-3226
atodd@uh.edu
http://www.music.uh.edu/
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