Appraisal prices versus price paid

[skeeve47]

Is there a rule of thumb for what a stone should appraise for following purchase? I recently had one appraise for 55% more than I paid, which I thought to be just fine.

 

[chrispassmore]

I'm right there with you. Mine appraised 82% higher. I can't tell if thats industry standard or not.

 

[sylvesterii]

an appraisal like that is basically a feel good appraisal, or you got the best deal in history. all it will really do is up the amount you will have to pay in insurance...it should basically appraise for what you purchased it for, or slightly higher.

 

[Richard Sherwood]

Most appraisals are done at an average retail replacement value at "bricks & mortar" non-internet pricing. This is because the vast majority of diamonds are purchased in this manner. It's not necessarily a "feel good" appraisal, but a indicator of the higher markup usually charged for non-internet stones.

If you're buying a very low markup stone over the internet, I wouldn't be surprised if it appraised for 50 to 80% more. Internet prices are usually much lower than retail jewelry store prices.

If you don't want to pay premiums on the higher retail value, you could ask the appraiser to appraise at a lower retail value, along the lines of internet pricing.

 

[aahq]

I am still stumped with what I should do with buying 4.5 carat champagne diamond for $10,000AU. I have it independantly valued at $18500 but I am still not confident I am paying the best price. The appraisal system worries me that it can be so far wrong and makes you wonder if a diamond can ever be bought as an investment...

 

[Richard Sherwood]

An appraisal is an opinion, and the more experienced the appraiser, the better the opinion.

There are plenty of appraisers out there who should be washing dishes for a living.

Who issued the appraisal on the champagne diamond? What sort of experience does he list? What sort of organizations does he belong to? What kind of reputation does he have?

Any Tom, Dick or Harry can write up an appraisal and put a value down. Your job is not to blindly accept information fed to you, but check it out to see if it holds water. You would do the same with any other investment, wouldn't you?

 

[Iceman]

Depending on what market your looking at ?? Your appraisal value reflects
replacement at a jewelry store. This is a price you will never get for the
merchandise and Im always amazed that they do!

If you want to know what the merchandise is really worth , ask for a fair market
value. You might be shocked that its worth less then you paid for it and that original
feel good appraisal wont feel as good.

Good topic, thanks for bringing this up.

 

[diamondsman]

One should not buy a diamond as a n investment,Diamonds have been known throughout the years as having more of sentimental value than monetary.Unless you buy very unique pieces such as colored diamonds such as pink ,red,blue,& green.These are investment diamonds, and collectors pay top dollar for them.(but again if you pay top dollar for them to begin with then you might not be able to make a quick profit).
as far as appraisals, they are for insurance purposes and most people are happy with the higher mark up that the appraisal gives them,
so that they can sleep better at night knowing that if they loose their diamond over the years and the price of diamonds have gone up they will be able to repalce it.

 

[hoorray]

One lesson I learned this time around is that those higher appraisels will just cost you extra in insurance. Most insurance companies charge per $$ insured, and retain the right to "replace or refund" at their choice. (Chubb might be different, from what I have read here.) You know they are not going to replace it by buying retail, -- they can buy cheaper than you can, so they may be charging you a premimum based on a $10k appraisel, but it will only cost them $5k to replace it (or whatever your numbers turn out to be). You will get the same replacement ring if it is insured for $5k, and you'll pay half the premimum.

I recently asked to have my new appraisel for slightly more than actual replacement cost (just to give me some buffer) so now my premimums reflect what I'm actually insuring. (This is after 15 years of paying twice what I should have been paying.) It's a racket in my opinion !

When I talked to my insurance company, they also admited that it is not true replacement value that they are insuring. If the diamond goes up in value, they suggest I have it reappraised periodically and change the amount of insurance accordingly.

 

[skeeve47]

Thanks for your comments. I did indeed buy the diamond from the lowest priced internet store on pricescope, ADOL (which I now can recommend). So my guess was that I paid a better price than 95% of average joe consumers out there (any thoughts on this self-serving statement? ) who learn about the 4 C's from the mall jeweler and never get beyond that.. that being said, I have no doubt that part of the appraisal was "feel good"-- very conveniently, it just barely exceeded the magic $20K level.

 

[diamondsman]

what did you buy, if we may ask?/

 

[skeeve47]

I got a 2.38 ct princess, H, VS2, table 74 depth 67, for about $12900.