Market value of home

Established Collecting Patterns

Seasoned antiques and collectibles dealers may find the concept to be ‘old hat,’ but the truth is, the more popular and desirable a thing is, the greater likelihood it will sell quickly. That truth is not always readily apparent to those who are new to this rather specialized sales arena, however. So the ‘True Collectible’ guideline is an attempt to convey the principle.

The online selling field may seem infinite in scope, too, with millions of potential customers worldwide. But, success in selling collectibles on the Web is gained in much the same way as it is in the physical world, by knowing buyers’ needs and meeting them. Success can depend to a great degree on whether or not you are offering collectible properties able to meet at least one of these three key commercial elements:

1. Not easily obtainable locally.
2. Wide appeal due to a current surge in popularity or because an item is able to ‘cross over’ collecting boundaries.
3. Competitive pricing.

Consider the Market’s Opinion of the Item

Say that whenever she can, your neighbor’s Great Aunt Mable clips articles about David Hasslehoff out of current periodicals. She collects these by pasting them into a scrapbook. Is it likely that multitudes of other people share her desire to do this? If she were to try to sell said scrapbook full of modern clippings online, would very many buyers react favorably and vie to buy it? While her scrapbook may be factually described as ‘rare’ or a ‘one of a kind’ item, who else but Mable might care to own it, even so? How can such an item be assigned sure status as a ‘true collectible’ with an established and recognizable monetary value?

Because collectors often look upon their collections as having investment potential, collectibility always contains monetary implications. So, manufacturers often hype the ‘limited’ nature of new items they have to sell, or they might place a public declaration on the item itself, to imply sure and certain future value.

But, neither limiting production, nor printing the words ‘Fine Collectible’ on either an item or the box in which it came, can ensure that future collectors will want items more than others do today – or that they will be willing to pay more to own them. Great Aunt Mable’s scrapbook illustrates that simply knowing someone, somewhere, collects a particular thing can’t automatically grant that thing status as a ‘true’ collectible. Maybe 50 or 100 years in the future Mabel’s scrapbook will be all the rage. Today, and probably for the near foreseeable future, others will judge it to be just a scrapbook full of common clippings.

Only the market at large can decide which things are highly desirable or more valuable than other objects. The individual collector or manufacturer has little actual ability to impact secondary market choices in regard to preferential items.

So, What is a ‘True Collectible?’

Basically a True Collectible is an item for which a reasonably well numbered audience of avid buyers can be expected to exist and for which a pattern of recognizable trade on the secondary market has been established.

If that statement doesn’t clarify the notion sufficiently, it may help to mentally replace the word ‘true’ with the word ‘legitimate.’ A 20-year-old sock previously owned by a musician would not be a ‘legitimate’ collectible. But a sock of the same age, and the unimpeachable provenance of having been on the right foot of Elvis Presley while he performed ‘Jail House Rock’ on the Ed Sullivan show, would be legitimate, since trade in Elvis memorabilia is a well established collecting niche.

To ‘collect’ means to accumulate as a hobby or for study. A ‘collection’ is a group of objects or works to be seen or kept together. But a ‘collectible’ is a group or class of objects sought by collectors. Note that the definition is expressed in plural form, ‘by collectors.’

When something can stand the ‘test of time’ and even though an older item (or perhaps because it is older) people seek it, then offering it to collectors on the open market at an attractive price can logically be expected to result in its sale. If something very new cannot yet be found in a printed price guide book, printed for collectors, then a sale will likely be slow or non-existent, or the price at which it must be sold in order to move it out of inventory will not create an appreciable profit.

Confirming whether a piece has been mentioned in a printed price guide book as required by site listing requirements can help to ensure it meets the designation of a ‘true collectible,’ as defined above. If determinations like this are always made before listing newer items, shoppers are likely to begin to find a wider variety of the kinds of things they are actively seeking. And a gradual increase in sales may very well be the welcomed result.

By: Karen Frishman

Q. My eighty-four-year old mother is selling her house and moving in with me. Can she purchase a life estate in my home in order to preserve her money in case she enters a nursing home?
A. Yes, under the Deficit Reduction Act of 2005 (DRA), a person who purchases a life estate interest in another’s home for full consideration and lives there for at least one continuous year does not face an ineligibility period for Medicaid nursing home benefits. If your mother expects to live in your home for at least a year, she could purchase a life estate in your current home or in a new home, which gives her certain rights to your property, including the right to live there. This provision does not apply to a transfer of property which your mother previously owned.

An attorney can assist you in determining the amount for which the life estate should be purchased, based on your mother’s age and the value of the home. The life estate has no value for purposes of determining an individual’s eligibility for Medicaid. As the life tenant, your mother has the legal right to live in the property for life or for a specified period without paying rent. Upon her death, the life estate is extinguished.

If you sell your home during your mother’s lifetime, your mother would have to sign the deed and a portion of the sale proceeds would be payable to her as the life tenant. Those proceeds would count as her resources for Medicaid purposes.
Q. What if my mother does not sell her house? Can she transfer it to anyone without being penalized?
A. Yes. Transferring the house to the following people would not affect her eligibility for Medicaid:
spouse child under the age of twenty-one or a child who is certified blind or certified disabled at any age a sibling with an equity interest in the home who has resided in the home at least one year immediately prior to the date the patient became institutionalized and continues to lawfully reside in the home a caretaker child who has resided in the home for at least two years immediately prior to the date the patient became institutionalized and who provided care.
Q. What if my mother enters a nursing home before she sells her home?
A. If her equity interest in the home is $750,000 or less and she intends on returning home, it will not be considered as a resource in determining her eligibility for Medicaid. The equity value is derived by subtracting encumbrances such as liens and mortgages from the fair market value.

Reverse mortgages and home equity loans can be used to reduce the equity interest. Medicaid law is constantly changing and is subject to various interpretations. Because the DRA is so new, there are many ambiguities and uncertainties. Do not take any action without first consulting an attorney who thoroughly understands the Medicaid rules.

By: Bob Friedman