In addition, when considering a used piano being sold by a private, non-commercial seller, keep in mind that many such sellers really have no firm idea of how much their piano is worth, and have made up something based on little more than a wish. Therefore, don’t let a high asking price keep you from making a more reasonable offer. Ask the seller how they arrived at their asking price. If you can back up your offer with your own technician’s appraisal (including a list of the things that need to be fixed), credible listings of similar pianos, or other evidence of the piano’s true value, you stand a good chance of getting the piano at or close to your price.

In this article, I’ve tried to assemble some information and tools to help buyers and sellers understand the appraisal process and determine the value of a piano within a reasonable range.

Fair market value is the price at which an item would change hands between a willing buyer and a willing seller, neither of whom is compelled to buy or sell, and each of whom has reasonable knowledge of the relevant facts.

Appraisers of used pianos and other consumer goods typically use three different methods to determine fair market value: comparable sales, depreciation, and idealized value minus the cost of restoration.

Comparable Sales

The comparable sales method compares the piano being appraised with recent actual selling prices of other pianos of like brand, model, age, condition, and location. Generally speaking, this is the most accurate method of determining value when one has access to a body of information on recent sale prices of comparable items. The problem here is that, with few exceptions, it’s rare to find several recently sold pianos that are perfect matches for all these criteria. There is no central repository for sales information on used pianos, and each appraiser or technician, over a lifetime, sees pianos that are so diverse and scattered as to these criteria that they are likely to be of only limited value as appraisal guides. (Exceptions might be technicians or dealers who specialize in used Yamaha, Kawai, or Steinway pianos, brands that have attained near-commodity status in the piano business.)

To handle this problem, I and my staff have attempted to approximate the fair market value of pianos of various types, ages, and conditions by querying a number of piano technicians about their memories of comparable sales. The result is the accompanying chart, “Prices of Used Pianos,” though I stress that we do not have enough data to do more than make rough estimates. This chart is most useful for determining the approximate value of many brands of older piano for which it would otherwise be difficult to find enough comparable sales to determine a value. Understandably, however, the price ranges shown in the chart are quite broad. The chart is organized by categories of vertical and grand piano broken down by age (pre-1950 and 1950–1980), quality (Average, Better, Best), and condition (Worse, Average, Better, Reconditioned, and Rebuilt). For prices of pianos made since 1980, I suggest using the depreciation method, described later in this article.

 

APPRECIATE OR DEPRECIATE?
Some piano manufacturers market their instruments as "investments" and tout their potential for appreciation in value. If that's the case, then why a depreciation schedule? Do pianos appreciate or depreciate?

It depends on how you look at it. Imagine parking a sum of money in a savings account earning 2 percent interest at a time when inflation is at 3 percent. Each year, the balance in the account grows . . . and loses purchasing power. This is something like the situation with pianos. After a large initial drop in value during the first five to ten years (because, unless given an incentive to buy used, most people would prefer a new piano), used pianos lose value in comparison with similar new ones at about 1.5 to 2 percent per year. However, because the price of everything (including pianos) is rising in price at 3 or 3.5 percent per year (the rate of inflation), the value of your used piano will appear to rise by 1 to 2 percent per year (the difference between the depreciation and the inflation).

Why do we figure depreciation from a comparable new piano instead of figuring appreciation from the original price of the used one? Theoretically, it could be done either way. But the price of a comparable new piano is easier to look up — one might have to do a lot of research to find out what grandma paid for her piano. And the price of the new piano embodies all the inflation that has occurred between the original purchase of the used piano and the present, avoiding the trouble of having to look up the change in the cost of living during that time. The case is even stronger for using this method with foreign-made pianos: Tying the value of a used piano to the cost of a comparable new one makes it unnecessary to calculate the changes in the currency exchange rate — and sometimes changes in the currency itself! — that have occurred since the used piano was new.

Figuring depreciation from a comparable new piano is not without its own problems, however. With so many piano brands of the past now defunct or made to entirely different standards (usually in China), the task of figuring out what constitutes a "comparable" new piano can sometimes be formidable, if not impossible.

The Definitive Piano Buying Guide for

Buying New, Used, and Restored Acoustic Pianos and Digital Pianos

Spring 2014    Page 70

Spring 2014    Page 70

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