eBay As an Appraisal Research Tool: Are the Values Reliable?

In the world of collectibles, what may have once been thought rare before eBay could now be considered commonplace. Let’s imagine that you have an odd-shaped, artist-signed widget. You think it’s one of a kind because you’ve never seen another one like it. But a quick search of the available widgets on eBay shows another three identical ones - this week alone! But those items that are truly scarce can command top dollar.

If you are tempted to try a do-it-yourself appraisal by researching values on eBay, here are a few things to keep in mind.

• The seller has the option of a one-day, three-day, five-day, seven-day, or ten-day auction. The longer the auction, the more exposure it gets. Theoretically, the more exposure, the more bidders. The selling price of a widget that sells in a one-day auction may not be an accurate representation as compared to the selling price of a widget in a ten-day auction.
  
  
• Check only the "completed" auctions. The current price of an item still for sale is meaningless. Those that have ended reveal more significant information.
  
  
• The ending time of an online auction can influence the selling price. Those that end when most people are away from their computers (i.e., 3:00 AM or over a holiday weekend) may not achieve the best results.
  
  
• Don’t just look at the final amount. Open the auction details and check to see if there was a reserve, and if it was met. If not met, the item did not sell and the last amount bid is meaningless.
  
  
• How many bidders were actively bidding? It’s better to rely on the results of a hotly contested auction than an auction with just one bidder.
  
  
• Check the placement of the item. If it was listed in the wrong category, those seeking similar items may not have found it. A sterling spoon listed with comic books won’t get the same attention as if it had been listed with other sterling pieces. If the item is in a "featured" auction, it will also attract more attention.
  
  
• The wording of the heading will strongly influence how many people will see and bid on the item for sale. Wouldn’t you be more inclined to click on an auction titled "19th Century Art Nouveau Enamel Scent Bottle" than simply "Perfume Bottle"?
  
  
• Was the "Buy It Now" (BIN) feature used to purchase the item? The seller must set a starting bid, but has the option to set a "sell immediately" amount. If the buyer purchases using the BIN amount, it bypasses the auction method, ends the auction, and sells at a fixed price. If the first bidder ignores the BIN and bids in auction fashion, the BIN disappears from the screen and auction becomes the only method of selling from that point forward. A BIN amount may not necessarily reflect a true fair market value, since other bidders might have offered more than the BIN amount set by the seller.
  
  
• Completed auction results are only available for 30 days. eBay does not retain older records. It is difficult to determine trends with just a 30-day window.
  
  

Can an appraiser, even an amateur appraiser, rely on eBay prices? Yes, cautiously. It is always better to justify value by relying on multiple sources, but eBay results can certainly be one of those sources if specific facts are verified.

eBay winning bids are useful if the item being appraised is identical to the item offered for sale, if the condition of both items is the same, if the reserve price has been met, and the auction has concluded with a sale to the high bidder (check the feedback to make sure the item was sent and received). eBay prices are an indication of Fair Market Value which is used in appraisals for federal functions such as probate and estate tax liability, and non-cash charitable contribution; for jurisdictional functions such as divorce and for equitable distribution among heirs; but never for insurance coverage or damage claims requiring Replacement Cost rather than Fair Market Value.

So surf, sell, bid and buy on eBay. Check prices. But know the limitations of the values you’ll find online.