Whats it really worth?

[klavigne]

So I''m looking for a stone and my parents sent me to a jeweler that they have used often over the past 20 years. He is actually a friend of the family. So he sold me a 0.77 AGS cert, d color vvs2, no flour, id/id polish/sym. I got the stone for $5300 which I am very happy with. But he tells me it will appraise for double that amount. What is this really worth? If it would appraise for twice what I paid why would he sell it that cheap? Even being friends with my parents, I can''t see it making any sense. A diamond like this is very rare, I''m sure he could get more for it than that.
Thoughts, advice, reactions?

 

[belle]

it''s ''worth'' what you paid for it. that''s all. supply and demand. you did not get a steal on this stone if that is what you''re thinking. appraisals are often inflated and don''t represent the current market value of a diamond.

 

[Lorelei]

Welcome

If you check the search tool with similar diamonds above, what you paid is in the ballpark, maybe slightly less the other diamonds are priced at. It is usual for diamonds to appraise for considerably more than the price paid, so what you paid is about right for this diamond, you could have found one for a little less actually.

 

[ChooChoo]

Appraisal values are utterly irrelevant for anything except maybe insurance purposes. Most nice quality diamonds that people on this board buy appraise for a lot more then they pay.

As far as the value you got, it seems fair but not the deal of the century. He''s certainly not taking a loss on you. Here is the closest I could find to compare (assuming yours is an ideal cut as well as being ideal polish & symmetry - it may or may not be, we would need info on table, depth, crown and pavillion angles):

http://www.uniondiamond.com/diamonds/diamonds.php?search_type_id=4&action_type_id=2&item_id=AA084407&&0.73ct-D-VVS2-Round-Brilliant-Cut-Diamond


This diamond is a GIA .73 D VVS2 for $4200. If yours is also an ideal cut, it should be worth somewhat more than this because it''s a little bigger, your symmetry is ideal instead of very good, and AGS certs command a little premium over GIA. Is it worth $1000 more? Probably not, but considering that "family jewelers" will always charge a larger margin than online dealers, he''s not ripping you off.

Ultimately, if you''re happy with the stone, that''s all that matters. If you were considering returning it and doing more shopping, that would be one thing, but if you like your diamond and just want to make sure you didn''t get screwed, you didn''t

 

[Mara]

Date: 2/24/2006 2:39:17 PM
Author: belle
it's 'worth' what you paid for it. that's all. supply and demand. you did not get a steal on this stone if that is what you're thinking. appraisals are often inflated and don't represent the current market value of a diamond.

DITTO.

If this diamond was worth more than that, he'd have sold it for more than that. Jewelers are not in the business to give great deals to friends, they have to make a living like everyone else.

Also, I don't know if he told you that but a diamond like that is not exactly 'very rare'....why would it be? It's under 1c and it's a D VVS2. Those are not exactly unrealistic to find...ChooChoo found one that is similar up above, and I found another in the PS that is a .70 D VVS1 GIA AGS0 for $4000.

Now if it was a 4c D FL then maybe I could agree.

THOSE are hard to find with AGS0 proportions!

 

[klavigne]

So, if it gets appraise at twice the purchase cost, how will this affect the insurance cost? I''m wondering if it matters that I life in the NJ/NYC area. I guess all that really matters is that I''m happy with the purchase. It just made me curious that if it appraises higher why shouldn''t I turn around and sell it for that amount and upgrade to a bigger stone. I''m still really new to this so I''m just trying to learn as much as possible. I''m an optical engineer and hte diamond lenses we use are only worth what the cost of the rough plus the cutting polishing cost are, not a cent more or less. But with a jewelry diamond it seems like the price for two identical stones can vary a whole lot depending on region and dealer etc.... I guess it would be easier it diamonds were sold as commodities like gold. Oh well, I guess as long as my girl is happy, I''m happy

 

[belle]

Date: 2/24/2006 2:48:46 PM
Author: klavigne

It just made me curious that if it appraises higher why shouldn''t I turn around and sell it for that amount and upgrade to a bigger stone.

if you do, let us know how it goes!

 

[ChooChoo]

You will NEVER sell a stone for anything close to the appraisal value - in fact, you won''t be able to sell it for as much as you paid either, because people are afraid to buy from non-jewelers and will demand a substantial discount to do so.

As far as insurance goes, some companies will let you insure the stone for up to the appraisal value, but of course you''ll pay more for insurance if you do that than if you just insure it for what you paid.

If you are thinking about upgrading to a larger size, I suggest you do so now if you can still return the diamond, because there''s no way you''re even getting back what you paid if you try to sell it or trade it in. You got a fair price, but certainly not the biggest diamond you could get for $5300. If you looked at an F VS2, it would look to all the world as white and clear as your diamond, but for $5300 it would be larger.

 

[Mara]

you can actually ask for a realistic appraisal amount, not all appraisers will do the whole double the purchase price thing.

i''d insure it for what you can replace it for. you don''t want to be paying out the nose in insurance fees paying on a $10k appraisal, when you can replace the stone if it was lost for $5k.

also, i doubt you''d have luck with buying a stone and resaling it for double....seriously if this guy would be able to get more, he just plain and simply would!

lastly, appraisals are just estimates, someone''s subjective opinion on what the stone is worth. typically they are inflated and alot of times they want to seemingly make people feel good about what they bought.

 

[Mara]

Date: 2/24/2006 2:52:59 PM
Author: belle

Date: 2/24/2006 2:48:46 PM
Author: klavigne

It just made me curious that if it appraises higher why shouldn''t I turn around and sell it for that amount and upgrade to a bigger stone.

if you do, let us know how it goes!

i know, if it was easy, trust me we''d all be doing it!! hehehee...3c here i come!

 

[klavigne]

Mara, it is an ideal signature cut, whatever that means. I''ll have to pull up the cert. to get the angles and what not. I do remember that the dims were 5.82mm x 5.82mm, which is why it got the ideal sym, I''m assuming, I''m not sure what else AGS looks at to determine that. He never told me it was rare, but I always assumed that all D color stones are rare. I read somewhere that only 1 out of 10,000 stones will be graded as a D color, atleast on diamondhelpers website.
So if I tried to trade this diamond, I wouldn''t be able to get more than what I paid for it? So why even get it appraised then? Won''t the insurance agents use just sales reciept and the AGS cert to determine it''s worth?

 

[ChooChoo]

Insurance agents insure the stone for as much as you want. I agree with Mara, the inflated appraisals are mostly just to make people feel good. In your place, I wouldn''t get it appraised. Insure it for what you paid and relax. And no, you absolutely won''t get more when you trade it in. You''ll probably get paid less, or if you get very lucky and diamond prices go way up by the time you trade it in, you might get as much.

 

[Lorelei]

An appraisal means that a third party professional has assessed the diamond for insurance purposes, many insurance companies insist on a third party appraisal. This is also so that they have the exact colour and clarity of each diamond to protect themselves if a claim is made and any underlying issues with the diamond are seen. Also for your protection. You might possibly be able to insure with just the cert and receipt. You won't be able to get more than you paid for it if you want to trade it - possibly and probably less, that is the way it goes, if this was the case you could get more, your jeweller would have priced it much higher. You won't make money off this diamond, even if it is a D VVS, unfortunately.

Trying to make money off diamonds is very difficult for the individual, with the secondary market it is usual to have to accept 50% thereabouts of what you paid for it.

 

[ChooChoo]

D diamonds are rare, but so are E and F diamonds, and they''re all colorless. I wouldn''t pay more to get a D over an F just because a D is a little more rare.

 

[ChooChoo]

As an example of what i''m talking about, this is what you could get with your budget if you wanted to go bigger:
http://www.jamesallen.com/diamond.asp?cid=130&item=772754

A .91 F VS1. Slightly less rare than yours, maybe, but a lot bigger

 

[Mara]

yes...when i think of 'very rare' i think of REALLY HARD TO FIND....like 2c+ stones have been lately, aka you only see one or two superideal ones out there every few months.

does your jeweler have a trade-in policy? good to ask this now as well. you will get chances are what you paid for the trade-in in the future, if they have a policy and many times you have to pay X amount more to get the trade/upgrade value. aka spend another $5k to be able to trade it in in the future.

re-selling diamonds is VERY HARD. who will want to buy something like that stone from you? really think about it. would you be interested in buying a stone like that from someone? why? what can they offer you? how do you know it's really what the seller says it is? some gal on this forum just got shafted on ebay by paying $3500 for a D VVS and it turned out to be clarity enhanced and an all around dud. now she has to struggle to get her money back. this is why it's hard to re-sale diamonds for anything but a serious bargain basement price. i would almost always buy a diamond from a reputable source rather than some guy with a stone to sell me and a cert in his pocket.

appraisals are mostly for peace of mind and insurance purposes...the insurance company will take what the appraisal says most times over what you paid, but some appraisers will let you insure for paid value rather than declared. that is why i say tell the appraiser you want a realistic appraisal rather than a 'retail inflated' one.

 

[mrssalvo]

Date: 2/24/2006 3:06:52 PM
Author: Mara
yes...when i think of ''very rare'' i think of REALLY HARD TO FIND....like 2c+ stones have been lately, aka you only see one or two superideal ones out there every few months.


does your jeweler have a trade-in policy? good to ask this now as well. you will get chances are what you paid for the trade-in in the future, if they have a policy and many times you have to pay X amount more to get the trade/upgrade value. aka spend another $5k to be able to trade it in in the future.


re-selling diamonds is VERY HARD. who will want to buy something like that stone from you? really think about it. would you be interested in buying a stone like that from someone? why? what can they offer you? how do you know it''s really what the seller says it is? some gal on this forum just got shafted on ebay by paying $3500 for a D VVS and it turned out to be clarity enhanced and an all around dud. now she has to struggle to get her money back. this is why it''s hard to re-sale diamonds for anything but a serious bargain basement price. i would almost always buy a diamond from a reputable source rather than some guy with a stone to sell me and a cert in his pocket.

ditto..and I would actually pay quite a bit *more* from the reputable source just to avoid the headache of possible misrepresentation..but i''m also a firm believer if it sounds too good to be true, it probably is, especially where diamonds are concerned.

 

[ChooChoo]

There are essentially two fair values for any diamond - what you can buy it for and what you can sell it for. Sadly, there is a very large downward spread between the two because of reputational concerns and transaction costs. There''s no room for arbitrage in diamonds.

It''s a lot like luxury cars. Let''s say the sticker price on your BMW is $60,000 but you get a good deal through a family friend and pay $55,000. If you wanted to sell it a month later, even assuming you hadn''t driven it once and it was essentially brand new, you would probably lose $5-$10K. Why? Because an individual buyer would rather buy from a dealer than from you, so they would need a big discount to change their mind. And a dealer wouldn''t pay you more than an individual buyer would because they know what your best alternative is.

 

[robyn]

No matter what you insure personal property (including diamonds) for - what you will get in the event of a loss will be determined by what the policy says. For example - there is replacement cost insurance - and actual cash value insurance. You can insure a diamond that costs $5000 to replace for $10,000 - but if you have a replacement cost policy - you''ll only get $5,000. There are also so-called "valued policies" - in which the insurance company must pay the value stated in the policy if there''s a total loss. States sometimes mandate this last type of coverage when it comes to houses. But I''m not familiar with any laws that mandate this type of coverage with respect to personal property - and I''ve never seen a homeowners'' policy that provides this kind of coverage for personal property (perhaps such a thing exists - but I''ve never seen it). Robyn

 

[klavigne]

I agree with you on that point. Which is why it makes no sense to me that the appraisal price whould be twice. Thats like buying a $20,000 car and insuring it for $40,000. Sure it would be nice to hear that the stone is worth what ever the appraisal was, but if realistically it''s not, then why get it insured for that amount. Unless of course it''s lost and they give me twice what I paid for it, then I could see it making sense. I was there was a good thread on here for just appraisal/insurance questions. I''d love to read about what other people or going through trying to get there jewelry insured.
I''d just as soon give that extra insurance money to charity than to an insurance agent. Living in Jersey will make one learn to "hate" insurance frims!!!!
As a side note: My girl has tiny little hands, she wears a size 4. Plus she''s very active, how that affects the size of a stone she''d wear I''ll never know. The first stone I was seriously looking at was an ideal 1.35c D/ VS1 / ID pol. /ID sym. It looked HUGE on her tiny little fingers, she actually was afraid people would think it was gaudy. So she wants a 3/4 carat that''s what she gets, no complaints from me there

 

[Gemklctr]

You also can''t count on getting the full appraised value even from your insurance company in the event of loss. Many if not most policies allow the insurance company to replace your stone rather than pay the appraised value. If they can buy a comparable stone in the market at a lower price, which they can given that you just did so, they will. As a result, you will have overpaid for your insurance (paying for $10K insurance on a $5K stone). That''s why it makes sense to get a more realistic appraisal.

Many PSrs also give the insurance company very detailed info about their diamonds to ensure that any replacement really is comparable.

 

[Mara]

klavigne there ARE numerous threads on just appraisal/insurance questions where people like you have asked these same questions, you just have to look for them. There is a Search area right above this posting area. Good luck.

 

[Dancing Fire]

Date: 2/24/2006 3:23:02 PM
Author: klavigne
I agree with you on that point. Which is why it makes no sense to me that the appraisal price whould be twice. Thats like buying a $20,000 car and insuring it for $40,000. Sure it would be nice to hear that the stone is worth what ever the appraisal was, but if realistically it''s not, then why get it insured for that amount. Unless of course it''s lost and they give me twice what I paid for it, then I could see it making sense. I was there was a good thread on here for just appraisal/insurance questions. I''d love to read about what other people or going through trying to get there jewelry insured.

Klavigne
it''s very common for a stone of
and no....you didn''t hit the lotto on this purchase.