One Object, Several Correct Values: Why Every Valuation Is Different

An owner has a piece valued four times in a year and gets four different numbers, the highest more than double the lowest. The natural conclusion is that at least three valuers are incompetent.

All four can be correct. They were answering different questions, and the question determines the number far more than the object does.

The four numbers

Replacement value. What it would cost to obtain an equivalent item at retail, today, including the dealer's margin. This is the highest of the four and it exists for one purpose: insurance. It answers "what would I have to spend to be back where I was".

Open market value. What a willing buyer would pay a willing seller in an unforced sale. This is the value used for tax and estate purposes in most systems, and it is defined in law rather than by convention.

Auction estimate. A range the auction house expects the hammer to fall within, set with an eye on attracting bidding as well as on the object. It excludes the buyer's premium the winner will actually pay on top.

Trade or dealer offer. What a dealer will pay you now, in cash, taking on the risk and cost of reselling. This is the lowest number and it is not an insult — it is a bid, and it includes the dealer's capital, time and inventory risk.

Open market value has a statutory definition

Because this is the number that decides tax, it is worth reading rather than assuming. In the UK, section 160 of the Inheritance Tax Act 1984 defines it: the value of any property is "the price which the property might reasonably be expected to fetch if sold in the open market at that time".

The section then adds a rule that catches people out, and which is genuinely elegant: "that price shall not be assumed to be reduced on the ground that the whole property is to be placed on the market at one and the same time".

In other words, you cannot argue the value down by pointing out that selling an entire collection at once would flood the market and depress prices. Each item is valued as though it were being sold into a normal market, not into the glut its own sale would create.

For anyone holding a deep collection in a single category, that is a material planning point. The tax value can exceed what the collection would realise if it actually had to be liquidated quickly — an asymmetry worth knowing about before it becomes somebody else's problem, and one that belongs in the conversation covered by our guide to estate planning for luxury assets.

Why the gap between the numbers is wider than people expect

Three costs sit between what a buyer pays and what a seller receives, and they compound.

The retail margin. A dealer who sells at retail bought at less than retail. That spread is the business.

Transaction costs. Selling at auction costs the seller a commission and often photography, insurance and transport; the buyer pays a premium on top of the hammer price. The same object therefore has a different price for each side of the same sale.

Time. A dealer offering cash today is buying speed from you. A consignment that waits for the right sale, the right catalogue and the right bidders will usually realise more, and it is not money you have yet.

A spread of a third or more between replacement value and a trade offer is unremarkable. Treating the insurance figure as what the object is "worth" is the single most common mistake in this area, and it produces two errors at once: disappointment on sale, and a false sense of the collection's realisable value.

Which number you need, by situation

• Insuring: replacement value, updated periodically. Using an old market value here is how people find themselves underinsured — see insuring valuables properly.
• Probate, inheritance or gifting: open market value, on the statutory basis for the relevant jurisdiction, prepared by someone whose report will withstand examination.
• Divorce or division of assets: usually open market value, and often with both sides instructing separately.
• Selling at auction: the estimate, understood as a range, and always with the reserve discussed separately.
• Selling now, for certainty: the trade offer, compared across more than one dealer.
• Deciding whether to sell at all: the trade offer and the likely net auction proceeds, both, because those are the two things actually available to you.

What a proper valuation looks like

A number on its own is not a valuation. A usable report identifies the object precisely, states the basis of valuation and the effective date, records the evidence relied on, and is signed by someone with relevant qualifications who is prepared to stand behind it.

The basis and the date are the two fields most often missing, and they are the two that make the report usable. A valuation without a stated basis cannot be used for anything, because nobody can tell which of the four numbers it is. A valuation without a date is worse than none for insurance, since markets move and a stale figure will be treated as evidence of the wrong amount.

Independence matters as well. A valuation from the party who would like to buy the object is not independent, and a valuation from the party who sold it to you carries an obvious interest in the direction of the number.

The habit

Get the basis right first, then the number. Ask any valuer, before they start, which basis they are working on and to state it in the report — and if a figure arrives without one, it is not yet a valuation.

Doing that turns four conflicting numbers into four answers to four different questions, which is what they always were.

The statutory definition quoted is the UK's, read on 19 August 2026; valuation bases for tax purposes are defined separately in every jurisdiction. This is general information, not tax or legal advice.

Frequently asked questions

What are the four valuation numbers?

The four numbers are replacement value, which is what an equivalent item costs at retail today for insurance purposes; open market value, what willing parties pay in an unforced sale for tax and estate needs; auction estimate, an expected hammer price range excluding the buyer premium; and trade or dealer offer, what a cash-ready dealer pays now.

What is open market value?

Open market value is what a willing buyer would pay a willing seller in an unforced sale. This value is used for tax and estate purposes in most systems and is defined in law rather than by convention, such as in section 160 of the UK Inheritance Tax Act 1984.

What is replacement value used for?

Replacement value is the highest of the four valuation numbers and exists for one purpose, which is insurance. It answers what you would have to spend today to obtain an equivalent item at retail, including the dealer margin, to be back where you were.

Why is a trade or dealer offer the lowest valuation number?

A trade or dealer offer is the lowest number because it represents what a dealer will pay you in cash today. It is a bid that includes the dealer capital, time, and inventory risk, as the dealer takes on the cost and risk of reselling the object.