Question for the Appraisers

[diamondsbylauren]

Hi Everyone,
We had something kind of unusual happen this week, and I''d be grateful if I could get some expert advice about appraisals.
Here''s what happened:
A lady bought a 3 diamond ring which had a center radiant GIA graded IF.
She took it to a high end jewelry store for an appraisal- and she needed it in a rush.
They did a rush job, and charged her $500
They also informed here that the diamond was the diamond on the GIA report, but it was not IF, but rather VVS1.
The appraiser made this declaration having NOT removed the diamond from the ring.

My questions:
Is $500 a fair price given that she provided both GIA report, as well as an appraisal written by a seller?- consider that it was done in a "rush"
Is it ethical for a professional appraiser to declare a diamond NOT Internally Flawless if it is set in a ring?

Any assistance is greatly appreciated.

 

[denverappraiser]

David,

Presumably they saw something in the stone that caused them to call the grade VVS1 (Instead of supplying a range like VVS2-IF with a limiting condition because of the mounting). This would be on the plotting diagram that they included. There are two options that they can be describing – GIA missed something or something happened to the stone after GIA examined it. The appraisal should clearly state which of those they believe to the case and why they believe it. This is especially true if they have agreed that it is the same stone that was examined by GIA. The difference is important.

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

 

[Rank Amateur]

I would think it would be unethical to not explain to the customer why (and maybe how) it came to be graded VVS1 instead of IF. For $500 I'd want something more than a "looks like a VVS1 to me".

What nicked it down off the IF grade?

 

[diamondsbylauren]

Thank you Neil and RA
We're at a disadvantage because I do not have a copy (yet) of the appraisal.
I do know the appraiser claimed there was a "very small nick on culet/keel line".
How someone could feel comfortable grading such a tiny flaw on a miniscule surface while it's obstructed by a setting?



Neil- is it a usual occurance that an appraiser "overrides" a GIA grade?

Does the fact that the Appraiser is a retail jeweler take away from the impartiality of their assesment?


One more question- isn't GIA's standard a ten power loupe? If you examine an INternally Flawless under a 30 power microscope, wouldn't be possible to find things invisibe to the 10x loupe?

I so much appreciate your time Neil, where do I send the check????

 

[oldminer]

"If" rthe appraiser actually saw an external, visible blemish under 10x they are right to say they see it. It would be WRONG to infer that the diamond is not the right diamond if other data, such as color and measurements make it seem as if it were the correct diamond. Somehow, I think the appraiser has overstepped themselves.

The fee? Well, its more than enoug, even for a rush job. Do we do our best work when we "rush" something? Not usually.

I would be glad to take a look to see if I can bring some clarification to you and your client at NO charge other than shipping.
Usually this kind of problematic appraisal opinion kills the sale. If it is too late, that''s the end, but if the client still is considering the stone, we''d be pleased to see what we find.....and we won''t rush.

 

[Richard Sherwood]

Date: 9/30/2005 4:46:16 PM
Author:diamondsbylauren

Is $500 a fair price given that she provided both GIA report, as well as an appraisal written by a seller?- consider that it was done in a 'rush'

Is it ethical for a professional appraiser to declare a diamond NOT Internally Flawless if it is set in a ring?

I'd have to know more in order to make a judgement regarding the fee, and even then I don't feel comfortable commenting on other appraiser's fees. How big was the center stone? Did the fee cover the entire ring (3 stones), or just the center? How extensive was the work which was done? Was a full "cert like" reporting of all characteristics done on each three stones?

If a gemologist appraiser can see something in the diamond, it doesn't matter if it's mounted or not, it's not internally flawless.

This of course (to answer your question in a following post) depends on whether the inclusion can be seen at 10x.

The way GIA (and every gemologist appraiser operates) is they use higher power to locate any and all characteristics in the stone. Then they back the power down to 10x to see if they can still see the characteristics, and then they assign the final grade after pulling the stone out and examining it with the loupe.

 

[denverappraiser]

David,

As mentioned above, if the grader sees something in the stone under 10x, it’s not an IF. If it’s a nick in the culet, it’s not out of the question that this occurred after GIA saw it. By all means they should report what they see, including the fact that it’s accompanied by a GIA report that they don’t agree with. It seems likely that they are quoting the GIA report for other data, like exact weight and origin of color so the GIA should be included in their document with an explanation about why they disagree with part of it’s contents.
What to do about it is another interesting problem:
For starters, wait and read the report. They might be right. If you still think it’s wrong, take the ring and the report to an independent appraiser and get a second opinion about the alleged damage and the merits of the report. There’s a nice list of them at the top of the page.

I would NOT accept Dave’s offer to do it for free although this is very generous. His objectivity immediately comes into question because he will be seen as a friend of yours, as evidenced by the lack of a fee. If you use Dave’s firm, pay him his customary fee, which I suspect is substantially less than $500, even with shipping.

If it’s determined that the stone has been damaged, and there is some reason to believe that it was damaged when you sold it, suck it up and offer a refund. Pull it, repair it, resubmit it to the lab and reset it. The customer may be willing to keep it if you do this but it’s his call. It’s a bummer but that’s life. You said it was IF so you should deliver IF. If your second appraiser doesn’t think it’s damaged, make the following offer:

“We will hire an expert to take the stone out of the mounting, I will personally deliver it to GIA for reexamination and have a master setter reset it when it returns. We’ll then go back to the independent appraiser to confirm that it’s still undamaged after the setting and that there are no other problems that have been caused by this process. If it’s anything less than IF, we’ll absorb all of the costs, including your $500 appraiser and we’ll refund your purchase price in full. If it comes back IF, you pay all of the costs, including the lab fees, the setter, my appraiser and the shipping and you keep the stone. “

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

 

[Richard Sherwood]

Another option would be to ask the customer if they still like the stone, and if so, offer them a discount for the price difference between an IF and a VVS1.

This is after making sure it''s not an IF. An independent appraiser would probably be the best to use in this case.

 

[diamondsbylauren]

David- Thank you for your generous offer- actually, the situation described is hypothetical at this point.

In fact, it''s really not worth taking any action as far as recut even if there was a microscopic nick on this specific diamond because:
1) based on what the apprasier said, there''s absolutely no visual impact
2) the diamond was a Light Yellow- as such different rules of pricing apply. That is to say: If we compare the value of two fancy colored diamonds- both well cut and similar in size. One is a weaker color, yet within the same color grade- ( there''s Fancy Light Yellow stones which are closer to Y-Z, and others look much closer to a Fancy Yellow) If the darker diamond has a GIA report calling it Fancy Light Yellow SI1,( and it''s eye clean), and the lighter one was FLY/IF- the deeper colored stone would bring a higher price -regardless of the clarity.

This is particualrly true in the higher dollar stones -like Fancy Intense Yellow, or Fancy Vivid Yellow- where there can be 20% swings due to intensity of color within the grade.
We satisfied the new owner with an offer to pay for the appraisal as a credit off her next purchase -she really loves the ring and none of this changed that.

But, here''s the part I guess I did not emphasize correctly:
When a diamond is in a ring- especially with side stones- how could you be totally certain that what you were seeing wasn''t dust, or some other foreign substance.
When I grade a diamond I clean the sucker 100 times with alchohol! It seems to me that it''s not possible to get the diamond clean enough after it''s been set to grade clarity to the VVS level
Plus you can''t really see the diamond from all the angles neccesary to assess it to this degree of accuracy.
Since the questionable spot was deemed VVS1, we know it''s really tiny- I just don''t see how they could comfortably say that it was an actual imperfection, or nick.


As far as the price-
say a ring had a center diamond that was 2 3/4 carats center and about .90 in high white diamond trapezoids- is $500 fair?

 

[denverappraiser]

David,

There are several issues at play here. It sounds like you’ve got a happy arrangement worked out. I’m glad to hear that it’s not advancing into something ugly. The fact that VVS1 is not significantly different in value from IF with this particular stone is not the point. Neither is the fact that you charged a fair price even if it is a VVS1 (to the grading issue). Surely you would agree that if you sell something that you call an IF, it should be an IF. Formerly IF before someone damaged it is not the same thing, even if it isn’t easily visible and even if the reduction in value is nominal. If they want it, this would be valid reason to ask for a refund. Again, I’m thrilled that this worked out for you and your client and that this has turned into an academic discussion.

I won’t discuss someone else’s fees because I don’t know the details of the services being offered but your other question is a good one. The gemologist’s methodology may be a concern. You’re right, it’s not easy. Personally, I work really really hard at this before I will sign my name to a statement that a stone is a VVS1 based on something I see on the keel, especially in light of a GIA report that says something to the contrary. This can be a big money issue and how the appraiser approached this should be discussed in the body of the report. I will include 60x or even 200x photos of this sort of thing for exactly this reason (I have a very cool microscope). Grading is done at 10x but documentation can be done in whatever way is required to communicate the information in a meaningful way. That’s why I suggested that you wait to see what the report says. It’s not completely out of the question that it thoroughly and completely explains what the appraiser did and how they came to their conclusions.

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

 

[diamondsbylauren]

Surely you would agree that if you sell something that you call an IF, it should be an IF. Formerly IF before someone damaged it is not the same thing, even if it isn’t easily visible and even if the reduction in value is nominal.

Good point Neil- I agree- If someone bought a diamond specifically because it was Internally Flawless , this would have been a horse of an entirely different color.

For example- say this question arose on a 2.80 D/IF- and the appraiser called it a VVS1- now we''re talking a huge difference in both value, as well as percieved quality. Such a question would certainly warrant the expense and trouble of removing the diamond and re-submitting to GIA for a re-check- If I was the buyer it would also warrant an immediate return and refund.

I think D IF is the ultimate example- if a case like this arose concerning a J IF, I don''t think most buyers of J/IF would freak out if an appraiser called it VVS1- unless the fact that it was IF played a large role in the decision to purchase the diamond- which is far less common on J colors as compared to D.

When she was shopping, the person who owns the ring was considering two rings featuring stones of the same grade- one a VS1, the other IF- ultimately the choice came down to side stones- the VS1 had trilliants, the IF had trapezoids- which was her preference. So it was not the clarity that caused her to buy the diamond.



Neil- who you callin'' ugly?????

When this arose we immediately offered a full refund, which she could have gotten even if she''d never gone to an appraiser in the first place.
She really loves the ring and chose to keep it and put this behind her.
I''m the schmuck who got so angry at what I percieved to be irresponsible appraising......I still think it was a high price too......

 

[denverappraiser]

Date: 10/1/2005 4:50:48 PM
Author: diamondsbylauren

Neil- who you callin' ugly?????

These situations can get remarkably icky with certain people. For example: You sell a 2.80 FIY/IF for a certain amount of money that would generally be agreed is a great deal. The appraiser calls it a FIY/VVS1 and the customer flips out. You offer a full refund - they refuse. You offer to let them keep the current stone with some sort of discount - they refuse. Recutting it to a 2.79 FIY/IF is not sufficient, even if you offer it at some sort of a discount. They insist that you provide them with a 2.80 FIY/IF for the agreed upon price! It all goes to court as a case of misrepresentation and you end up with a court order that you have to go out and spend whatever is necessary to supply them with a a stone that fits the agreed specifications.

This is what I call ugly.
I guess people and the courts in New York are too reasonable to do this sort of thing.

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