How independent does an independent appraiser have to be?

[dockman3]

Ok, first off, I know this topic has been beaten to death, but for some reason I couldn''t find an answer to this question by searching through old topics. So sorry if this has been asked and answered and maybe somebody can point me in the right direction.

Here''s my current problem. I bought an engagement ring and it came with an appraisal from the B&M I bought it from. It looks to be a complete appraisal and that''s what I"m using for insurance purposes right now. But I still would like to have a 3rd party appraisal done and everybody suggests using an independent appraiser. I totally understand and agree with the reasons for this, but I''m having a truly difficult time finding an "independent" appraiser. I''ve used the search tool here on PS, but there aren''t any appraisers listed for my state, IN, and the closest one is about 100 miles away. I''ve even searched online for independent appraisers and looked at the websites for some of the national appraisers associations and there still aren''t any in my area. There is a local jeweler in town, not 10 minutes from my house, who does appraisals and doesn''t seem to sell as much jewelery as he does repairs. Is he "independent" enough? He''s not a certified appraiser, but I think I''m going to have to drive a long way or ship my ring to one of them for the service. I really would rather not ship it and would like to be there for the appraisal itself. Here''s his website if anybody wants to check him out: http://www.johnmarshalls.com/. Thanks in advance for all your help!

 

[oldminer]

There is just no reason at this point to get an obviously non-independent appraisal. There are many good reasons to want a truly indepndent appraisal, especially near the time of purchase, but paying for what may be potentially biased is sort of a time waster. I don''t know this particular person or store, but the best way is to utilize "experts" who have no potential bias whenever you make important financial choices. It isn''t always convenient or easy, but there is no real substitute.

 

[dockman3]

Date: 6/24/2008 2:52:26 PM
Author: oldminer
There is just no reason at this point to get an obviously non-independent appraisal. There are many good reasons to want a truly indepndent appraisal, especially near the time of purchase, but paying for what may be potentially biased is sort of a time waster. I don't know this particular person or store, but the best way is to utilize 'experts' who have no potential bias whenever you make important financial choices. It isn't always convenient or easy, but there is no real substitute.

OM, thanks for the response. I need that kind of honest answer. I was kind of afraid somebody was going to say that. I know that people, i.e. the general public, use local jewelers as appraisers all the time, but now that I"m a PSer, I don't know if I can do it! I feel like I should get a 3rd party appraisal and not just use the appraisal the store gave me, since its not very independent. If my ring had cost upwards of what I paid for my car, then I would consider getting a truly independent appraisal, but since it didn't, i don't know if its worth the hassle of driving 2.5 hours one way and paying upwards of a $100 for an appraisal, plus at least $50 in gas. The local guy only charges $65, which I can handle. He doesn't charge based on appraisal price, which is a good sign. I guess I'm torn on whether or not to even get a 3rd party appraisal. Any suggestions? Thanks.

 

[denverappraiser]

It really depends on what you are trying to learn from your appraisal session.

New purchase customers generally have two different objectives. The first is to confirm that what they got was properly represented, that no important information was omitted and that the price was reasonable. The second is to provide paperwork that will be bound to an insurance contract and will provide the purchase order for the replacement as well as define the coverage limits of the policy.

It’s worth observing that these objectives are rather different. For the second (the insurance thing), what you need is an appraiser who prepares a thorough document, especially the description and photographs. There is no particular reason that this person be independent at all and, in fact, lots of jewelers provide documentation that’s entirely suitable for this as part of the purchase. Often the selling jeweler has useful information like exact weights and style numbers that actually give them an advantage over someone who wasn't involved earlier. I can’t assess the merits of what you were given but it’s easy enough to do yourself. Read it. Does it contain sufficient detail that your insurer will be able to replace the piece with another of ‘like kind and quality’ using this document alone as a guide? Does it include everything that you would like to be considered in the course of the replacement? Is the value conclusion appropriate to do the replacement without paying for unneeded coverage that you can never collect on? You just shopped for it, you just bought it and you probably have a pretty good idea what things like this really cost, you've got the item in hand and you know what was important to you when you were so it’s usually fairly easy to recognize an ‘appraisal’ that’s out of whack or that's lacking important details.

The other objective of deciding if you’ve been misrepresented is more difficult and it’s where independence comes in. Obviously if you are second guessing the advice and/or grading given to you by the selling jeweler, a written opinion by that same jeweler or one of his lackeys does no good at all, even if it turns out to be correct and even if it’s suitable for the insurance application above.

Is an opinion from one of his or her competitors? That depends. It’s a definite conflict of interest and this is cause for concern but it doesn't make them wrong. Whether it’s a deal killer for you depends on your confidence in the appraiser and just how worried you are about the jeweler. Anyone who wants to can hang out a shingle and call themselves an appraiser and a lot of jewelers do just that. Most appraisers are associated with jewelry stores, auction houses, antique stores and other businesses where their primary business is buying and selling things. That’s because this is where the money is. Appraising, in a pure sense, isn’t generally a very good business and 100% appraisal firms are distinctly rare so it’s not all that surprising that there isn’t one close to home. Many of us have national practices where we get the merchandise in via USPS or FedEx and the communication with our clients is done over the telephone and email for exactly this reason. I must say, most of the 'independent' appraisers do a more thorough work than the 'free' paperwork provided by the jewelers but that's mostly a function of being a more professional service than their independence and there's no reason that a jeweler can't do a superb job. Few people do their best work for free. The majority of jewelery store appraisers have no appraisal training AT ALL but some are highly qualified. Ask.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver

 

[dockman3]

Neil,

Thanks for your input! The document that the original seller gave me is fine for insurance purposes. The appraised value was just enough over the selling price to give me some safety for insurance purposes and the extra few dollars a year in insurance isn''t going to hurt me. So I don''t need an insurance document necessarily. I really would like an independent appraisal to see a) how good of a deal I got and b) to just double check things. I do trust the jeweler I bought it from as they are considered by many the best jeweler in town and been around for 80 years in the same location. Nobody else in town has had that kind of staying power. I just wanted the peace of mind of knowing that I got what I paid for and that I paid a fair price for it. With all that said, I did find an independent one who will see me this coming Monday for a full appraisal. She was very nice and fit me into her schedule when I''m going to be in town. I think I''ve gotten this straightened out now, but thanks again for all your advice! I really appreciate it.

 

[denverappraiser]

Glad to help. That sounds like a fine plan. This is exactly where an ‘independent’ is useful. An opinion by the selling jeweler, although possibly correct, CAN’T be a double check on what the jeweler already told you and an opinion by a competitor, again possibly correct, is sufficiently tainted by the conflict of interest that if the answer is no, you then have to hire a 3rd appraiser to adjudicate that one. You haven't really learned anything. You made a wise choice grasshopper, let us know how it goes.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver