Blue Nile Appraisal

[PhillipSchmidt]

First thing - thank you all. This topic is great!

Rich, I appreciate your comments regarding the average jeweller. I feel strongly that being the average jeweller should be enough for most customers. I agree with your point wholeheartedly that if you can''t do something well enough yourself, get somebody else to do it.

I am confused about the relevance of insurance appraisals v. market appraisals, based on the posts above.

I would have thought, an insurance appraisal should allow the buyer a ''buffer'' to enable them to replace an item without undue hassle.

On market appraisals, the consumer needs to know if the asking price reflects the norms''. He wants to know if the price is good and if he/she is paying the right price and therefore looks to an appraiser for their professional direction.

I can’t estimate what that means to you.

I can see a grey line here as the best of the professional appraisers will be expected to value the same goods to the same price without discrepancy or else endanger their independent partiality.

Next…

There really is no way an appraiser can accurately value a hand-made piece - all things considered, without having an intimate knowledge of it''s particular manufacturing process.

For example, I made some earrings today by hand. I made a version of the common rex-claw setting. I would have bought a cast one, but it is the holiday season, so in order to meet his deadlines I couldn''t, nor should have, as it turned out. If my customers wife lost one and needed one replaced, and I wasn''t there and they went to their local B&M jeweller they may not be able to replace it. It is a one-off, in essence designed to his parameters.

He wants a valuation and I am handling that process. I expect a shock when I tell the valuer, they took 6 hours to make, (butterflies, another hour), when a standard fabrication charge would cost no more then an hours work with results close to similar of the original, but entirely different. Would that suffice?

Where would that leave my customer? He did very well on price, but may not do so well in a future

Phillip S

 

[newenglandgemlab]

Hi all,

This has been a wonderful thread. Lots of great thoughts and different opinions.

Let me stir the waters a bit. I use different markups on diamonds based on cost and different qualities and cuts and sizes. It gets a little complicated. It isn''t straight across the board. How about Old European cut diamonds? I use a higher % on those. Don''t you think an Edwardain 2 carat center diamond ring in wonderful condition would bring a higher markup? Absolutely! Any thoughts on that, Dave Old Miner?

In order to keep in contact with what is going on in the retail trade I have developed about 8 or 9 retail trade accounts of what I consider very good higher end B&M retail jewelry establishments, mostly AGS stores. I feel that when I am doing work for them my independence is questionable and I tell the clients this if what they are looking for is a truly independent appraisal. The primary reason is to keep in touch with what is going on in that market. I find most savvy jewelers have finally gotten to the point of being fairly competitive with the internet market but it has taken 3 or 4 years. They feel they are better off making the sale and making a client then not making more money (or making very little). Developing relationships is what the B&M market is all about. The market has been in a constant state of flux....it is very tough for appraisers to keep on top of changes. I am off to Tucson to get the ASA designation taken care of and give myself another avenue of information contacts.

I started this appraisal business almost 4 years ago and I have done more appraisal work in that time frame than in 20 years in the high end retail environment (doing appraisals just about everyday). I keep a private office to meet clients one on one for the independent appraisal work. This works for me. If I need pricing information I have good relationships with enough retailers that I have access to all kinds of pricing and market data. Try calling some of these designer companies telling them you are an appraiser needing info...you turn into a non-entity! Even going to the jewelry trade shows as soon as a sales person realizes you are in the appraisal business you become very not important.

Some designer pieces bring big money. Who am I to question the retail figure on those items. I use transaction data. Some of these items are jewelry art and have to be priced that way. The most important aspect is that the client is covered by their insurance company to their satisfaction.

Oh yes, and the house thing. We just moved this past May. When the bank had an appraiser do the work I asked how they arrived at the pricing. The comment was that you set the market when you bought the house....mmmmm....so the appraiser goes in knowing what the purchase price is and has a relationship both with the selling realtor and the bank and makes the deal happen...mmmmm!!! You think that is truly independent? Do you think the price is really that appraisers opinion? If the appraiser came in lower I bet he wouldn''t get any more work....mmmmm

I never seem to have time to write in much on this forum. Four inches of snow in CT this am....very pretty! School is canceled and I have a little extra time this morning. Cindy

 

[fire&ice]

In order to keep in contact with what is going on in the retail trade I have developed about 8 or 9 retail trade accounts of what I consider very good higher end B&M retail jewelry establishments, mostly AGS stores. I feel that when I am doing work for them my independence is questionable and I tell the clients this if what they are looking for is a truly independent appraisal. The primary reason is to keep in touch with what is going on in that market. I find most savvy jewelers have finally gotten to the point of being fairly competitive with the internet market but it has taken 3 or 4 years. They feel they are better off making the sale and making a client then not making more money (or making very little). Developing relationships is what the B&M market is all about. The market has been in a constant state of flux....it is very tough for appraisers to keep on top of changes. I am off to Tucson to get the ASA designation taken care of and give myself another avenue of information contacts.


Some designer pieces bring big money. Who am I to question the retail figure on those items. I use transaction data. Some of these items are jewelry art and have to be priced that way. The most important aspect is that the client is covered by their insurance company to their satisfaction.

This is the most sensible thing from my point of view.

I''ve thought about this quite a bit. I''m coming from a completely different perspective. Most of the appraisal nightmares I have seen have been a "valuation for sale." I am not talking about estimates given by minor nor major auction houses. Those are estimates of what something may or may not sell. I''ve seen just as many items not clear reserve (low estimate) as I''ve seen items selling far above the estimate. I look to these - but it just takes two to drive up a price. Or, someone''s cell phone connection lost for an item to fall below the high estimate. I''m with Rich on this one - I find little to some value in the record price & the lowest price. Sure, maybe you CYA with comps - but they aren''t as relavent to determine a fair selling price.

All of the examples (and I could produce a 100 page document on others) I gave about "mis" appraisals were formal ones done by Independent Appraiser''s with credentials. They were for estates prior to any selling venue. To be specific the appraiser did not understand how "hot" the Old West painting genre was. The other did not understand how "hot" Pre-raphaelite art was selling across the pond. In these instances, we weren''t talking about a few hundred dollars - MAJOR difference.

Which even brings up a further nut. Perhaps the estate wanted the valuation to be low. Not as much of an issue in the future - but the estate takes a huge hit tax wise in a valuation over 2mil (I think that is what is scheduled for 2005).

I know you may think I am not qualified to comment because I''m not an appraiser. I''ve just have quite a bit of appraisal in action experience. Yes, I''ve seen appraiser over price an item - but this is less dangerous as the market will correct itself on that. But, from my perpective, unless you are *really* are on top of the market, if you don''t have something that fits a certain model, then I think an Independent Appraiser would be remiss if they didn''t reach out to a retail operation specializing in the object/item. At the end of the day, the person who should be appraising the object is the person who specializes - and yes sells - the item. Except for reputation & perhaps some legal ramifications, the dealer has more to loose by not being on top of their niche market - i.e. valuation of said objects. It''s their livelihood.

I also like Cindy''s comment (though paraphrased) about - "who am I to question the the big prices some designer''s bring". In my biz - it''s *all* about the name; and sometimes not about the quality of the work. A Taxco piece signed by Spratling will command big bucks compared to a comparable piece by a no name. Doesn''t make much sense - but it''s the market.

On an interesting note, insurers will pay out for jewelry listed as objects of art even if these objects are not covered under a jewelry policy. Fine line - but argueable.

In the end, as a consumer and not as an Art & Antique dealer, I see so many different reasons for appraisals. And, in the end, what type of appraisal one is looking for may effect the appraisal goal - or should it?

Insurance
As Rich notes - quality & price fair - a request for information appraisal
Estate settlements
Divorce settlements
Bankruptcy
Determining a fair selling price
Donation appraisals
Even determining whether a stolen object is petty or grand larceny.

My head is spinning. I''m glad I don''t appraise.

On an interesting note, one of the Major''s left the six figure painting as not notable for their sale. Can''t know everything.

 

[diablo]

Going back to where I started the thread, I decided to get an independent appraisal from a B&M store. The first one I approached said they only value items that they sell themselves and the second one said the cost would be Euro 45 + 1.5% of the valuation amount. So they are being incentivised to give a higher valuation. They also said it would take about 3 weeks. Is this kind of percentage based pricing unusual?

I can add the ring to my home insurance policy at the blue nile valuation for Euro 150 per year so I may just do that.

 

[denverappraiser]

diablo! Welcome back. We pretty thoroughly hijacked your thread eh?

Do not use any appraiser who charges a fee based on the result.

The appraiser who declined the assignment may know of others in your area that will accept outside assignments. Appraisers of other kinds of items, like fine art and collectables, may also be able to help you locate someone in your area. Where are you? Blue Nile may also be able to help you find someone.

Neil Beaty
Independent Appraisals in Denver

 

[diablo]

Yeah I was thinking I had opened a can of worms by starting the topic!

I''m based in Dublin, Ireland. In hindsight I should have got the appraisal done in New York when I was there in December but thought at the time I should get a local appraisal for the insurance company here. The B&M store charging %age (Weir & Sons) are probably the most respected store in the city but they admitted that they are one of the only stores who still do appraisals which probably explains their charges. I''ll look into the fine art/collectable appraiser option.

 

[fire&ice]

Date: 1/6/2005 10:29:29 AM
Author: diablo


I can add the ring to my home insurance policy at the blue nile valuation for Euro 150 per year so I may just do that.

Honestly, why make it so complicated for this guy? I would add the ring to your home insurance based on the blue nile valuation. Are you over insuring - perhaps? But, you have insurance which will cover the ring. No more time, worry or money spent.

 

[denverappraiser]

I agree with F&I. Use the BN appraisal for your insurance purposes. This has become an interesting academic discussion amongst the pros that doesn''t really address your original issue. The only reason I would see for you to get it reappraised is if you are inclined to second guess what BN has told you or if your insurance company won''t accept a valuationl done by an overseas firm. Neither of these seems to be the case. Any savings you get in insurance premiums will be eaten up by the appraisers fees.

Neil Beaty
Independent Appraisals in Denver

 

[RockDoc]

Checking comps

I pretty much do what Cindy has written.... Although there are enough jewelers in Boca that I go in many times pretending to be a retal consumer.

I have lots of contacts, that cooperate with me....and as such getting retail comps isn''t so hard.

After the data is collected, how its analyzed is the key. Many times similar is not exact so the appraiser has to make certain adjustments.

Lots of detailed issues arise on purchases along with proper analysis of what results you found.


I have lots of contacts with AGS stores too having been a former retailer member of AGS.

As another appraiser pointed out to me, consumers constantly "over pay" for Starbuck coffee. Are they wrong in charging more than others who sell coffee?

The analysis of the keystone markup merchant''s price depends on how vibrant such comparable sales are. If he is the only retailer in your area that is doing that, well his price may be analyzed as extrodinary to the most common marketplace. That is a decision that you make and report. Appraisers are to report the facts, not make decisions.... that is up to any concerned parties.

Commonly, with competition as active as it is, you don''t run across this many times, so it isn''t a daily issue. Where the analysis is more difficult in my area is the retailer that sells a used item as new without disclosure. That''s another ball of wax though..

Rockdoc

 

[fire&ice]

Date: 1/6/2005 12:47:55 PM
Author: RockDoc
Checking comps

I have lots of contacts, that cooperate with me....and as such getting retail comps isn''t so hard.

After the data is collected, how its analyzed is the key. Many times similar is not exact so the appraiser has to make certain adjustments.

Lots of detailed issues arise on purchases along with proper analysis of what results you found.


Rockdoc

Agreed. And, precisely the kind of thought process that makes a good appraiser. It''s all in the details. The devil is always in the details.

Getting back to the orginal question sort of - and being very specific. Let''s say designer ring x demands that the ring be sold at keystone or close to keystone on the retail market. Wouldn''t the insuree insure at keystone? Wouldn''t the insurer''s jeweler of choice have to sell to the insurance company at retail? Or, are insurance companies excempt for the dictated markup?

The reason I ask is that the prices on some of these designer settings are staggering. In some cases, the setting price is on par with diamond price.

 

[Richard Sherwood]

When a designer has an established name and track record for commanding and maintaining a certain market price, that is the figure at which the piece should be appraised.

Comps would be the appropriate method for valuing such a piece.

In other cases, such as a 1 carat I/SI1 diamond with a class 2 make, the valuation is much more cut and dried. Calling jewelers for comps is unnecessary (and impractical), as there are already thousands of comps established for easy reference.