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drcello
Registered User
Posts: 437
(6/18/01 6:46:35 am)
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Buying and
selling Strads...
Here is a very interesting story about Bein and Fushi and the trade
in Strad violins...
http://www.chicagotribune.com/news/metro/chicago/article/0,2669,ART-52417,FF.html
Marshall C. St. John
drcello@vei.net
Wayside Presbyterian Church
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Andrew
Victor
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User
Posts: 342
(6/18/01 9:10:36
am)
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Re: Buying and
selling Strads...
I'd read of the story before, but not in such detail as to
Selegman's history.
The old saying is right about "money
being a source of evil!"
It would be a powerful influence on
such dealings in the future if the fines inflicted are large enough
to remove some involved dealerships from the market. Even more
fitting if they are forced to sell some of their stock at discount
to pay the fines.
Some of the "bargain basement" prices given
in the article that Selegman paid at the end of WW-II were actually
not that low, being within a factor of two of pre-war low-end prices
on a del Gesu, and actually within the range listed by John
Fairfield for the Strads.
Andy
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David
Sanders 
Registered
User
Posts: 590
(6/18/01 9:18:34
am)
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Re: Buying and
selling Strads...
Does this mean when I find a book or autograph to buy so I can
resell in my business that if I'm going to sell it for $100, and the
owner is only asking $40, I'd better tell him it's worth more and
give him $80?
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Peter
D
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User
Posts: 30
(6/18/01 11:44:30
am)
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"Experts" and
Appraisals
If you represent yourself as an "expert", then it is unethical to
ask someone what they want. You are suppose to tell them what it is
worth. This is why these "experts" are being sued for saying one
thing and then doing another.
But experts can be clever. For
example, I took my cello to Mr. Morel about a month ago. He looked
at the cello for about 10 minutes and then told me that he liked my
fine instrument, but that I would have to pay him 5% of its value
for him to say what it was worth. No papers, mind you - just for him
to "say" what it was worth.
"But", I objected, "that could
cost several thousand dollars."
"Yes", said Mr. Morel, "But
you see, otherwise, I would be devaluing the appraisal trade."
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David
Sanders
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User
Posts: 595
(6/18/01 1:18:54
pm)
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Re: "Experts"
and Appraisals
> You are suppose to tell them what it is worth<
Why
shouldn't an expert charge for his/her knowledge? Why wouldn't you
expect to have to pay for an appraisal?
I think if it comes
down to the dealers only being able to charge a 10% commission, then
we'll start seing appraisal charges go up to 20-30% of the value of
the instrument.
If someone comes in to a shop and asks for an
appraisal, he pays the appraisal fee. Then, if he wants to sell the
instrument, either at that dealer or another, he has a good idea
what it is worth. He still can't expect to get that amount, because
the dealer will always take a commission for selling an instrument.
If he wants to get the full retail value, he has to sell it himself.
And if he's gotten the appraisal from a reputable dealer, then he
can say that the instrument has papers from whichever dealer it's
from. But he still has to find a buyer.
People seem to think
that selling instruments is so easy, and they can do it themselves.
I don't think so!
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G
M Stucka
Registered
User
Posts: 600
(6/18/01 1:30:56
pm)
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Re: Buying and
selling Strads...
David, Let's say I come to you with an autograph and ask you for an
appraisal. You appraise the autograph for $50 and then I tell you to
go ahead and sell it and get the $50 for me. Then, you turn around
and offer the autograph for sale for $1000 and sell it for that
amount, even though you've told me that, in your best expert
opinion, the autograph is worth, at most, $50. Is that simply "good
business" on your part? Any conflict of interest here?
OR,
taking this one step further.....you've appraised my autograph for
$50, I take it to another "noted authority" who offers a different
opinion and states that the autograph is worth $10, but you refer to
the other authority as a "drunken bum". I entrust the autograph with
you and you sell it for $1000 and only give me my $50. Also, good
business on your part??
I think there's a difference between
someone offering something for sale at a low value as opposed to
someone coming to you for advice on valuation and then being given
purposely low estimates.
(PS. I've offered the above examples
to make a point. They are strictly hypothetical. In my business
dealings with David, he has always been most honest and is a dealer
of the highest integrity.)
I think the problem with all this
is the lack of regulation in our economic system. How much profit a
dealer can make vs. what the same dealer can offer as an appraisal
has not been defined....definitely room here for conflict of
interest. It's always been and continues to be a "buyer beware"
situation
Edited by: G
M Stucka at: 6/18/01 1:34:56 pm
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David
Sanders
Registered
User
Posts: 597
(6/18/01 1:58:47
pm)
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Re: Buying and
selling Strads...
Gary, if you brought me an autograph to appraise, and I appraised
it for $50 when in fact it was worth $1000, then you could shoot me.
If I give an appraisal, and I assume, when most dealers give
appraisals (although maybe I am being extremely naive here) they
give a fair market appraisal of what the item is worth.
If they
don't, then they would be guilty of fraud. Maybe this is what has
happened in the Segelman case, I don't know.
I can't imagine
that a dealer would put his reputation on the line and purposely
undervalue instruments so he can then turn around and sell them for
much more. (Once again, maybe I'm just really naive.)
I
imagine the thing to do is always get at least two appraisals, even
if it costs a lot for the appraisal, and make sure to get them from
competing dealers who don't like each other.
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Peter
D
Registered
User
Posts: 31
(6/18/01 4:56:39
pm)
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Experts and
Appraisals
I never suggested that dealers shouldn't charge a fee for service.
In fact, I had called ahead and scheduled an appointment with Mr.
Morel for an "instrument consultation." Their fee: $45 for 15
minutes with Mr. Morel. A reasonable fee.
I had also inquired
about policies and procedures regarding appraisals and was told
about the 5% fee that is charged for written appraisals. They keep
your instrument for a couple of days, so that it can be "studied and
evaluated". Then you pick it up and get paperwork certifying the
instruments authenticity and value. The 5% fee isn't cheap, but
they're reputable.
But still, I didn't want a written
evaluation because we're satisfied about the year and make of the
instrument, and another dealer had given me an idea of its worth. In
that case, I was told that I could schedule an instrument
consultation with Mr. Morel, and he would confirm or deny my
information. So I went over.
There was, obviously, a
miscommunication. For all I know, Mr. Morel is a gentleman and has
every right to ask 5% for a verbal appraisal. I didn't happen to
want to pay 5% for a say so, and I did not do it. For all you know,
you would have paid him, I guess.
Regarding the bit about
dealers having to charge 10% commissions, where are those dealers
located?
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David
Sanders
Registered
User
Posts: 598
(6/18/01 5:10:00
pm)
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Re: Experts and
Appraisals
>Regarding the bit about dealers having to charge 10%
commissions, where are those dealers located?>
I was
saying that if it came down to dealers only being able to charge 10%
commission because of being sued, etc., that's what might happen.
Offhand, I don't know any dealers who at the present charge only 10%
commission.
I am surprised that you were quoted the same 5%
fee for a verbal and written appraisal. That doesn't make any sense
to me at all. I don't think I would have paid it either.
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drcello
Registered User
Posts: 439
(6/18/01 5:26:18 pm)
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Bottom
line...Caveat Emptor
Let the buyer/seller beware! Make haste slowly. And all those good
old proverbs...
Marshall C. St. John
drcello@vei.net
Wayside Presbyterian Church
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dennisw
Registered User
Posts: 202
(6/18/01 10:51:24 pm)
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Re: Buying and
selling Strads...
I agree with Gary. Any unregulated trade involving so much money is
going to be corrupted by traders who turn a blind eye to problems
with conflict-of-interest, outright fraud etc. Why do that (at the
risk of their reputation)?? It's worth the risk, that's why. They
probably won't be caught and if someone complains they can say "sue
me". In the middle somewhere is a settlement, if all else fails,
that still leaves them way ahead of the game.
This notion of
"professional ethics" and "dealer associations" makes for nice
wallpaper in the showroom, but some statutory restrictions on
appraisal and representation would give these guys added incentive
to stay honest. Ask any lawyer if it's easier to bring a lawsuit to
court with well-known and clearly-worded statutory law behind you
rather than just case-law.
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rocel
Registered User
Posts: 11
(6/19/01 4:06:54 am)
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Re: Buying and
selling Strads...
I would've thought that when one goes to get one's instrument
valued, one should be paying for the time of the expert, as with
anyother proffesion. It seems slightly ludicrous that one should be
penalised for having a valuble instrument. I have heard of this
5/10% charge in the states. In England, I've never been even charged
for a valuation, and when I aqquired both my cello and bow, I took
them 'round several big dealers and independent experts for
opinions. I guess I was very lucky...
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 Daniel
Ortbals 
Registered
User
Posts: 196
(6/19/01 8:09:41
am)
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Community Supporter
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Re: "Experts"
and Appraisals
Quote:
Then, if he wants to sell the instrument, either at that dealer
or another, he has a good idea what it is worth. He still can't
expect to get that amount, because the dealer will always take a
commission for selling an instrument.
Commission is one thing,
but doubling the selling price and pocketing the excess as
"commission" is a little different. Look at this hypothetical
situation...
Say I have some item I know to be rare, but I
don't know the market value of it. I go to someone and ask them to
sell it for me, and they tell me I should be able to get $1000 for
it. I let it sit in their shop on sale, expecting to receive my
$1000. Now, the dealer decides it's worth $8000, sells it and gives
me my $1000 and takes the rest as "commission." How is that right,
just because he told me it was worth $1000? Obviously, it was worth
more.
The problem with the situation in the article is the
fact that these instruments were meant to be sold so the money could
go to the charity foundation. The dealers had an obligation to
provide an accurate assessment of the market value of the
instruments. This is not a case of dealers being compensated for
their time, or taking their fair share of commission.
Dan
O |
SW
Registered
User
Posts: 62
(6/19/01 9:09:32
am)
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Fraudulant
appraisals??
Suppose someone went to the "Antique Roadshow" and was told that
Grandma's old rolltop desk was only worth $1000 for whatever reason,
and the dealer offered to buy it. However, the dealer knew all along
that this was the first rolltop desk ever made and it was
handcrafted to boot. He knew all along that it was really worth
$10,000 and the "right" person may pay even more. To me that makes
the appraisal fraudulant. I certainly don't know the first thing
about the string instrument trade, but it seems that someone
appraising an instrument could be highly motivated to give
"inaccurate" appraisals, because they stand to benefit greatly from
the practice. The instrument I play is not so costly and probably
for that reason I believe I've generally been dealt with fairly. The
general practice for the dealer to estimate the fair market value.
Then I am given the price he would pay if he was to buy the
instrument from me, being open about what he wanted/needed to make
as a mark-up. Option 2, is to sell on consignment. Then he would
price it and sell it at the market value he had previously mentioned
and take x% commission. Everything is up front and above board. No
sneaking behind my back, giving me some hard luck story about how it
really is only worth $X and it is going to lay in the shop for
months/years and he will be lucky to get $Y, so really can't give me
more than $Z, but he then turns around and gets 10 times what he
told me it was worth. In my book, that is not good business, it is
fraud.
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David
Sanders
Registered
User
Posts: 599
(6/19/01 9:24:45
am)
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Re: "Experts"
and Appraisals
>Say I have some item I know to be rare, but I don't know the
market value of it. I go to
someone and ask them to sell it for
me, and they tell me I should be able to get $1000 for
it.<
I don't know how to make the dealer differentiate
between "what it is worth" and "what I can get for it" other than by
asking.
For insurance purposes, I would assume that most
people would have up-to-date appraisals for some time, before trying
to sell an instrument.
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David
Sanders
Registered
User
Posts: 600
(6/19/01 9:30:52
am)
Reply
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Re: Buying and
selling Strads...
Before I bought my cello from Bein and Fushi, I took it Carl Becker
for advice as to whether it really was what I was being told it was.
He spent about half an hour with me I guess, looking at examples in
several books, concluding that it was real. I think I paid $75 for
his time (in 1983, when $75 was $75), well worth it.
I think
it's amazing that in England they don't charge for
appraisals.
Obviously, when you buy an instrument at a shop,
you don't have to pay for that shop's appraisal. (At least I never
have.)
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ruthann
Registered User
Posts: 493
(6/19/01 10:18:49 am)
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Re: Buying and
selling Strads...
As for selling on commision, consider this tale:
A locally
made cello was taken to a shop in LA, which shall remain nameless,
with the idea that the cello be sold on commision from that shop.
The shop offers to take the cello, says it will appraise the cello
for a certain amount if the cello is sold from that shop. That
certain amount was about twice what the owners expected, more than
twice the origional purchase price.
I was rather taken aback.
Not that the cello couldn't be worth that much - how would I know?
But the phrase "we will appraise it for X dollars if the cello is
sold from this shop" struck me as all wrong. What would they
appraise it for it it wasn't to be sold in their shop?
cello_suttonr@hotmail.com |
rubycello
Registered User
Posts: 6
(6/19/01 10:23:24 am)
Reply
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Re: Buying and
selling Strads...
I live in England and have had to pay for written appraisals
before. Normally the charge was about 1-2% of the appraisal value.
However, I have been lucky enough not to have to pay for verbal
appraisals, and most dealers I know have been happy to spend time
talking with me about the instruments.
I have come across
dealers who refused to value instruments that I was looking to buy
without the owners written permission. Also some won't comment at
all on instruments being sold by other dealers.
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SW
Registered
User
Posts: 63
(6/19/01 12:34:56
pm)
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Re: Buying and
selling Strads... On the other hand...
On the other hand "buyer beware" should be turned around to "seller
beware." If one is buying a house or other real estate, expensive
jewelry or artwork, or paying for expensive repairs or home
improvements, one will shop around, get estimates and be sure that
they are not being overcharged. It behooves everyone who is selling
something or simply owns something valuable to keep track of its
potential selling price and/or replacement value. That will prevent
one from jumping to take the money when a dealer or private
individual makes what seems on the surface to be a great offer.
However, having a dealer who has some kind financial interest in the
instrument giving an appraisal is more than a bit sticky. Charging a
percentage of the value for an appraisal doesn't strike me as too
ethical either. Quite an incentive for inflating the price, I would
think. When houses are appraised, a flat fee is charged--and it's
not the real estate agent who does the appraising! And furthermore
one receives an appraisal report showing recent comparable sales in
the neighborhood and other pertinant info used in coming up with the
figure. I'll bet that some dealers collaborate so they can keep
their buying prices low, i.e., let's all agree to appraise the
instruments we see at x% below the real market value. Then when
someone takes their instrument around, they get the same
artificially low price from everyone. That way they all get to buy
at bargain prices. Are any of them honest?
Edited by: SW
at: 6/19/01 12:42:59 pm
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Laura
Wichers
Moderator
Posts: 1005
(6/19/01 4:26:01 pm)
Reply
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Re: "Experts"
and Appraisals
"I don't know how to make the dealer differentiate between "what it
is worth" and "what I can get for it" other than by
asking."
I think a point to be made is that instruments, or
anything for that matter, are only worth what you can get someone to
pay. I agree with Mr. Sanders on this. My family deals in antique
glassware on occasion and I have done my own share of "wheeling and
dealing." The fact of the matter is, I'm going to charge as much
money as I think someone will pay, and nothing less.
With all
this commission business, you can't just look at the instruments and
the money. What about the property taxes or lease the business
owners must pay? The insurance and utility bills? The cost of paying
for sales help and advertisement?
It's not greed to charge
what someone will pay. If you want to complain to someone, complain
to whoever keeps paying more and more money for instruments, jacking
up "values" so much than regular musicians cannot even afford decent
equipment.
Laura
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Laura
Wichers
Moderator
Posts: 1006
(6/19/01 4:28:17 pm)
Reply
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Re: Buying and
selling Strads...
It's just like medicine..... always get a second, maybe even 3rd or
4th, opinion.
Laura
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