Appraisal Procedures

[sukiisukii]

Hi Everyone,

I am new to pricescope and my very first post was to annouce that I am a newly engaged lucky lady

My fiance (sigh... that gives me butterflies) purchased a ring from Blue Nile and it is gorgeous. It is 1.02 ct/F/VVS2 Radiant Cut on a platinum setting. The diamond was GIA certified and came with an appraisal from a gemologist from Blue Nile. The ring was purchased for a little over $7000, but their appraisal was for $11000. Chubb stated that we can get it reappraised so we can get better premiums. I work for a jewelry manufacture company and had the gemologist in our company appraise my ring. But my question is here, they asked for the receipt from Blue Nile which had the setting specifications and the GIA report but not for my RING?! And according to the paperwork and the Rapaport book, the appraiser appraised the ring for $8175.

Now... is this standard procedure?!! How does one appraise a ring without seeing the ring? I am considering bringing the ring for more elaborate evaluation but I don''t know where to go and whose trustworthy and whether this is necessary.

How does a ring get "appraised" and why such a big difference in appraisal value?

I am new to the forum, and I apologize if this topic has been discussed in previous threads. Any advice would be great! Thanks in advance.

Best,

Sukiisukii

 

[Richard Sherwood]

Appraising an item without seeing it is a serious snafu. RockDoc will probably come along and tell us the legalities of it. It ain't pretty, I'm sure.

By not seeing the item the appraiser can not even verify that the diamond is the same as that described in the documentation supplied to him. For all he knows, it could be a cubic zirconia!

If he inserted a disclosure stating that he had not seen the item, and had based his appraisal on supplied documentation, that would be another thing. But by not inserting a disclosure he is implying that he personally viewed the item.

I think he blew it. I hope he doesn't do this regularly. I'm sure he meant well, but those are the kinds of things that can blow up in your face.

 

[moolman]

The appraisals that you got are worthless, as the saying goes, they aren''t worth the paper that they are written on. Think logically about it. How can something be worth more than what you paid for it. If it was worth more than what you bought it for, why did they not sell it to you for more. You diamond is worth "retail" about what you paid for it, if it was worth more you would of paid more, right, make sense?

Anyway, I also have a chubbs policy and they don''t require a appraisal for items under 50K, you can just insure it for the purchase price, just show them your reciept. That''s the realistic price to insure it for since if it''s lost or stolen you can buy another one for that price. Chubbs will also give you 150% of the value if the diamond appreciates.

So you can just throw those appraisals out the window, if it makes you feel good that it appraised high, you can show if off to your friend and family but the true price is about what you paid and actually worth a lot less depending on how good of a deal you got.

Alex

 

[RockDoc]

Hi Richard

Briefly, we go back to what I''ve written over and over again, about the obligation of the insured to disclose any fact that affects the risk of the insurance company.

Seller''s documents of value are "interested" and are no more acceptable than the seller of a house providing the appraisal or home inspection report.

The other very silly belief of many poeple out there is that items have ONE value/ selling price that are achieved. While there are some items that do sell for a very narrow range of pricing ( software I''ve found sells for almost the same price no matter where you buy it) jewelry has a very wide range of achieved selling prices, mostly dependent upon the particular market level in which the item is sold.

In this Blue Nile scenario where the item was actually sold for a price lower than their "appraised" value the appraisal document should disclose the actual selling price, and if the appraiser values the item at a greater price, they should report both values on the report, and NARRATIVE EXPLAIN WHY they have rendered the higher value.

The appraiser is to report FACTS and provide the relevant market values to the funtion, purpose/intended use. If more than one value truly is factual, the appraiser should report the complete information for readers and reliers of his report.

It is an absolute DISGRACE for a seller to write a document titled an appraisal for an item he sold or even to hire someone to do this for him. This is even more true when the value reported is in excess of the selling price, and the actual selling price information is kept from the insurance company. Seller persist in this highly unethical practice, which can result in serious cases for an insurance company to have a loophole to deny paying the claim.

I see appraisals consistently that are totally useless and improper. The public assumes a gemologist without valuation training and education is a credible person to do valuation assignments. Gemology schools do NOT teach pertinent classes on valuation. They teach gemology.

Even further there is rampant credential misrepresentation that is provided, such as "GIA Certified Appraiser" among a whole "host" of others.

Even more of an outrage are instances where the seller authors and appraisal for an item he sold, and includes a "statement of independence" within the report.

I could probably rant on and on about this stuff and write an "encyclopedia" here but I think the best test for consumers is if theiy submit a document titled an appraisal, from as seller it has potential issues, or a document stating the value is more than they paid, without disclosure of the actual sales price and WHY the value is in excess should be a BIG RED LIGHT. Additionally the appraiser should have done some research with iether the insurance agent or the insurance company to determine what the method they use for settling claims is for each instance, so it is properly addressed in the valuation.

I''ll get off the Rockdoc soap box for now.

I hope consumers will read their insurance policies and review their appraisals as well.

Rockdoc

 

[pyramid]

QUOTE from Rockdoc above

In this Blue Nile scenario where the item was actually sold for a price lower than their "appraised" value the appraisal document should disclose the actual selling price, and if the appraiser values the item at a greater price, they should report both values on the report, and NARRATIVE EXPLAIN WHY they have rendered the higher value.
The appraiser is to report FACTS and provide the relevant market values to the funtion, purpose/intended use. If more than one value truly is factual, the appraiser should report the complete information for readers and reliers of his report.


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If it is the opposite that the appraisal is lower than the goods were sold at should the appraiser also note the selling price?

 

[RockDoc]

Date: 11/29/2005 1:02:59 PM
Author: Pyramid

QUOTE from Rockdoc above

In this Blue Nile scenario where the item was actually sold for a price lower than their ''appraised'' value the appraisal document should disclose the actual selling price, and if the appraiser values the item at a greater price, they should report both values on the report, and NARRATIVE EXPLAIN WHY they have rendered the higher value.

The appraiser is to report FACTS and provide the relevant market values to the funtion, purpose/intended use. If more than one value truly is factual, the appraiser should report the complete information for readers and reliers of his report.


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If it is the opposite that the appraisal is lower than the goods were sold at should the appraiser also note the selling price?

That answer DEPENDS on the particular instance that is being addressed.

If the appraiisal is for less than the selling price, it depends on WHY the appraisal was performed.

This scenario is perfect applicable in the instance of an appraisal that reports comparable values. It could be facutal that the selling price was too high.

For insurance, the appraiser needs to explain all the truthful facts and explain WHY his opinion is rendered as such.

There are many reasons that an appraisal assignment in needed, and the report has to state the relevant information.

If you have a situation like this that has personally affected you, explain more in detail about the facts surround why this would have happened and I''ll answer it for you.

Rockdoc

 

[Modified Brilliant]

Even further there is rampant credential misrepresentation that is provided, such as "GIA Certified Appraiser" among a whole "host" of others.
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Roc doc is 100% justified in his rantings! Misrepresentation of credentials is still a huge problem in our industry. The words "gemologist" "certified" "GIA" etc. are being twisted and manipulated. Nothing new here...this has been going on for a long time.
Ask to see documentation or a diploma if you''re not convinced of the person''s credentials.

www.metrojewelryappraisers.com

 

[RockDoc]

Date: 11/29/2005 4:46:44 PM
Author: Modified Brilliant
Even further there is rampant credential misrepresentation that is provided, such as ''GIA Certified Appraiser'' among a whole ''host'' of others.
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Roc doc is 100% justified in his rantings! Misrepresentation of credentials is still a huge problem in our industry. The words ''gemologist'' ''certified'' ''GIA'' etc. are being twisted and manipulated. Nothing new here...this has been going on for a long time.
Ask to see documentation or a diploma if you''re not convinced of the person''s credentials.

www.metrojewelryappraisers.com

Hi Jeff.

Well here is some more info on this subject.


When a document bears the words, "Certified" - ask for the standards of the certifiication and when the Person claims to be Certified - ask who certified him/her and when.

Then if he claims certification or membship with AGS , ISA , NAJA, AAA or ASA go to their website or call the association to verify this and check on the currency of the credential and membership.

Recently, an appraiser who is listed on the appraiser''s resouce section of thiis site, who posted logos of an assortment of associations and titles. Turned out he didn''t have the credentials he misled people that saw these logos and wasn''t even a member of most of them.

Just for the record - GIA states that "they certify nothing, and certify NO ONE! GIA teaches GEMOLOGY not valuation.

Appraise the Appraiser !!!!!!!!

Rockdoc

 

[targa]

I have bought from whiteflash before and about to do so again. They seem very trustworthy, but from what i am reading on this string they shouldn''t be giving me an appraisal of the diamond at the time of purchase???
interesting, because i was going to ask the forum if it is imperative or mandatory to get an independent appraisal anyway after the stone is fed-exed?

 

[denverappraiser]

Whiteflash is indeed a reputable firm.

The documents that they supply with a sale aren''t appraisals and they aren''t labeled as such. They are a verification from an outside contractor that the stone is the one described on the included lab report and that it is undamaged as of the date of their inspection. Many insurance companies, including Chubb, are happy to bind a policy based on this report and your Whiteflash sales documentation but it is not an appraisal.

That said, I fully agree with Rockdoc''s comments above. There is a huge number of poorly done appraisals that are flatly misleading to the public. Many are deliberately intended to be deceptive. Appraise the appraiser.

Neil Beaty
GG(GIA) ISA NAJA
Professional Appraisals in Denver

 

[ademello]

I Agree Strongly with Richard. If the appraiser writes a Hypothetical Appraisal based on the fact that the given information does exist than it should be stated that based on GIA Cert # for example given the supplied information from 123456789 cert number. In this case the appraiser and the grading gemologist are (2) Two separate people which is perfectly fine if this is clearly stated in the appraisal however the client is at a disadvantage because its of the utmost importance to verify that the diamond being viewed and the cert are indeed one in the same. I''ve seen so many times Diamond dealers give customers the right diamond in the deal and shoot themselves in the foot by giving them the wrong cert many times even down playing there own diamond. Always verify the stone and cert for all patties concerned. Arthur DeMello Jr. GG (GIA) Boston Mass

 

[RockDoc]

I agree here with Neil''s post about Whiteflash.

I think consumers need to review the document they believe is an appraisal to see if it really is an appraisal.

Sellers can write an "Cost to Replace this item in my store" and most insurance companies will accept such a document for setting the amount of the insured value.

But a seller should not title the report "APPRAISAL" or put any misleading langauge in the document that would make it appear as being an independent, unbiased valuation document.

If you do have an APPRAISAL for "insurance" replacement or for acquisition for purchasing insurance coverage, the appraiser needs to know about your individual type of policy, and how the insurance company will settle the claim, so the proper and accurate valuation can be reported in the document.

An appraisal where the item is to be replaced is VERY different than an Apprasial for Stated Value or As Agreed Value policy types. If the appraiser doesn''t know the detials of the type of policy being purchased, how can the report be proper?
This scenario is particularly true where a seller has had someone prepare an appraisal for insurance purposes, in advance of making the sale.

So.... if you weren''t asked, chances may be that the appraisal doesn''t address the proper and correct valuation amount.

Rockdoc