Appraisal question for expert(s)

[SLK]

Hi everyone, just received a written appraisal from the independent appraiser. However, the picture the appraiser took is extremely horrible. It makes the diamond looks extremely yellow, to a point that it looks brown. (The diamond is 3.052 ct. SI1, J, AGS000 ACA from Whiteflash and it’s mounted in a exceldiamond/superbert 6 prongs tiffany style knife edge and it''s absolutly gorgeous and yes, extremely white from face down, only a tint of warmth from the side when view from certain angle(s) and lighting). Additionally, I found a few typo such as the ring is stamped Pt 950 for platinum but on the appraisal under “the mounting description” the appraisal stated “Stamped Pt905”. My question is can I ask the appraiser to take a better picture to be placed onto the appraisal and correct the typo without additional charge (I have paid $150.00 already). Additionally, should I insure the diamond ring at the actual cost or the amount suggested by the appraiser (increase in approximately $10,000.00 in value and insurance cost will increase in approximately $150.00 per year). Lastly, would an extremely ugly picture of the ring affect the insurance decision by the underwriter(s) from the insurance. Thank you and any feedback is greatly appreciated.

Kathy

 

[strmrdr]

You paid for an accurate report and didnt get one.
Demand a refund and go to a different appraiser.
Someone that careless should not be trusted.

 

[MissAva]

No good.

I agree with Strm I would not want someone that careless in charge of how my insurance was determined. Get your money back and get it redone.

 

[SLK]

Here is the picture and the typo on the mounting description

 

[SLK]

Sorry for the terrible scan. I had to cover his company name and address (and yes, I found him in PS’s appraisers’ list) And thank you Strmrdr and Matatora for the replies, I paid him cash and the only receipt I have is a handwritten receipt stated $150.00 for a diamond ring appraisal (with no terms and conditions stated on the receipt if the job was unsatisfactory). How can I go able to request for refund?

 

[WinkHPD]

Just because someone is on the list of appraisers here does NOT mean that they are any good. I just had a client told that his stone was worth less than what I paid for it from an appraiser who did not even recognize what an AGS 0 cut was.

Some of the appraisers listed are fabulous, some are totally incompetent. I am not as upset about the type of 905 instead of 950 as I am about the huge over pricing. It sounds to me as if your appraiser did not do the appraisal based on the market where it was acquired rather than on a formula markup over cost. A BIG no no in the appraisal world.

Of course I have no idea whether or not you disclosed the market where you purchased and the price to him or not. If he thought you purchased at a retail store his appraisal may have indeed been accurate as to market price in your area. We need more information to know for sure all that transpired between you.

Wink

 

[SLK]

Wink, thank you for your reply. I don’t mean to offend any appraisers whom are listed on PS. I guess I really just want to get an accurate report and a (much) better picture (my heart hurts to see my beautiful diamond ring can look as bad as something that would cost $1000.00 from ebay). I asked Lesley from WF to send the loose diamond to the independent appraiser along with the original AGS cert. Additionally, he (the appraiser) did explained to me the difference the appraisal value if I have purchased the stone on the internet vs. retail store vs. Beverly Hills. He did informed me that if I had purchased the diamond on the internet it will be a fair price at what I paid for. And if I had purchased the stone from a retail store it would have been $5000.00 more and $10000.00 more if I had purchased the stone in BH. So I guess I guess want to have an accurate report with a (much) nicer picture without paying additional. Sorry if I have offended any excellent appraisers here.

 

[Regular Guy]

Kathy,

Sorry, not an expert, but motivated to respond:

- I take it the diamond is the same one you discussed here back on 7/28?
- Certainly, you could take it back without apology and seek to have corrections made to the typo, and perhaps use the opportunity to encourage a second photo to improve the image...but apart from the typo or dissatisfaction, I''m not sure I see the basis for the refund.
- In working with my Nationwide agent...and btw...I would really like to see a FAQ or set of faqs on working constructively with insurance companies...which is the main issue at hand, it seems to me....I was led to understand that he would only insure the diamond based on the amount my appraisal would read, so, unless you do have that number revised, my insurer wouldn''t have given me the choice. I know different insurers have different practices on this. Also, in discussing the valuation of the diamond I purchased, there was no "market basket" discussion...she was just going to put down the one number she felt was descriptive, and I do understand she felt that was her job, to assess this correctly.
- If you can insure for the lower amount, and get a replacement to the described characteristics, isn''t it clear you should pay for actuals, rather than the higher amount assessed by the appraiser? Regardless of the higher premium, the narrative captured by the appraiser is designed to get you a replacement diamond of equal goodness, and so, you can let the insurer figure out how to do that...just so long as they do it.

Regards,

 

[SLK]

Thank you Ira Z and thank you for your replies. Yes, it is the same diamond I have discussed back on 7/28/2005. I will contact the independent appraisal as regards to the typo and perhaps (and hopefully he will)take a second photo. Again, thank you Strmrdr, Matator, Wink, and Irz Z for your replies.

P.S. Hopefully Brian, Lesley, and John from WF would not upset that I posted such an ugly picture on a ACA SI1,J, 3.052

 

[JohnQuixote]

Date: 10/6/2005 1:01:24 AM
Author: SLK
Thank you Ira Z and thank you for your replies. Yes, it is the same diamond I have discussed back on 7/28/2005. I will contact the independent appraisal as regards to the typo and perhaps (and hopefully he will)take a second photo. Again, thank you Strmrdr, Matator, Wink, and Irz Z for your replies.

P.S. Hopefully Brian, Lesley, and John from WF would not upset that I posted such an ugly picture on a ACA SI1,J, 3.052

Not at all. It was not one of your making - and I'm sure you'll have the opportunity to take many gorgeous pictures at your leisure. We would just like to see the appraisal issues resolved to your satisfaction.

 

[denverappraiser]

SLK,

By all means you should to complain to the appraiser. The typo and the photo can and should be fixed immediately and with a polite apology. There should definitely not be a charge for this.

The value conclusion is a different sort of problem because the market selection is so important. It should say in the narrative of the report what marketplace is being described. The appraiser will have chosen this market based on their conversation with you at the beginning about your intended use and this use should be clearly stated in the report. Was the market chosen appropriate to you intended use? If the market being described is not the same as the one where you made your purchase, this could explain at least some of the difference. The appropriateness of this change will depend on your stated use. Are they answering the question you asked during your appraisal session?

If you are unhappy with your appraisal session, send a comment to both the admin of this site where you saw their advertisement and to the dealer who referred them to you. Their only way of knowing if their clients are being well served and if their referrals are good advice is when someone tells them how it goes.

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

 

[WinkHPD]

Date: 10/6/2005 12:23:12 AM
Author: SLK
Wink, thank you for your reply. I don’t mean to offend any appraisers whom are listed on PS. I guess I really just want to get an accurate report and a (much) better picture (my heart hurts to see my beautiful diamond ring can look as bad as something that would cost $1000.00 from ebay). I asked Lesley from WF to send the loose diamond to the independent appraiser along with the original AGS cert. Additionally, he (the appraiser) did explained to me the difference the appraisal value if I have purchased the stone on the internet vs. retail store vs. Beverly Hills. He did informed me that if I had purchased the diamond on the internet it will be a fair price at what I paid for. And if I had purchased the stone from a retail store it would have been $5000.00 more and $10000.00 more if I had purchased the stone in BH. So I guess I guess want to have an accurate report with a (much) nicer picture without paying additional. Sorry if I have offended any excellent appraisers here.

I don''t think you have said anything offensive and now we know that the appraiser did cover all the bases with you as far as pricing. I would certainly go back and ask for the typo to be corrected, they are certainly embarrassing so he should be happy to do that. The better picture would seem to be a no brainer also if he has decent equipment.

I would also request that he list in the appraisal the type of the appraisal and the market for which it was made and request him to use and give you the pricing for the internet market, then you will be paying the appropriate amount for the appropriate type of insurance.

Wink

 

[Regular Guy]

Date: 10/6/2005 9:33:17 AM
Author: denverappraiser

The value conclusion is a different sort of problem because the market selection is so important.

Denver, and wink...why do you both pull out the issue of "markets" as fundamental. I''d rather see a consensus on making the evaluation of cut a part of your job. Although I think discussion and creating understanding is one thing, creating a document with a stipulation about valuation is another.

Regards,

 

[denverappraiser]

Date: 10/6/2005 3:55:35 PM
Author: Regular Guy

Denver, and wink...why do you both pull out the issue of 'markets' as fundamental.

Ira,

Because market IS fundamental.

SLK’s question has to do with the merits of the value conclusion, not the completeness or accuracy of the description. Cut has nothing to do with the question at hand.

Any statement of value without an accompanying statement that sufficiently defines both the property (which will include cut) and the market is useless. Not all gemologically similar or even identical stones are worth the same in every marketplace.

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

 

[WinkHPD]

Date: 10/6/2005 3:55:35 PM
Author: Regular Guy

Date: 10/6/2005 9:33:17 AM
Author: denverappraiser

The value conclusion is a different sort of problem because the market selection is so important.

Denver, and wink...why do you both pull out the issue of ''markets'' as fundamental. I''d rather see a consensus on making the evaluation of cut a part of your job. Although I think discussion and creating understanding is one thing, creating a document with a stipulation about valuation is another.

Regards,

I am not sure I understand your question. The evaluation about cut IS a major part of the job.

For an appraiser the correct valuation for insurance is impossible without an understanding of the market for which the appraisal is being made. An estate appraisal is no where near the number of a full retail appriasal, nor should it be. The insurance value and premium of a stone that was purchased from an internet dealer is different from a stone purchased from a Tiffany type location which will demand and get a much higher price. Thus the stone needs to be appraised at that price so that it can be replaced from there if necessary.

Wink

 

[Regular Guy]

Date: 10/6/2005 4:24:44 PM
Author: denverappraiser

SLK’s question has to do with the merits of the value conclusion, not the completeness or accuracy of the description.

Apologies for running amok with SLK''s thread...

Any statement of value without an accompanying statement that sufficiently defines both the property (which will include cut) and the market is useless. Not all gemologically similar or even identical stones are worth the same in every marketplace.

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

This distinction is a nicety that is perfectly fine in a self contained world where the appraiser would like to rigorously create a document that is internally consistent with itself. Unfortunately, it may be entirely inconsistent with the functionality the customer will derive from the session, which caused him to visit the appraiser, and in large part allows the appraiser to do what he or she does. Regardless of the selected marketplace, and unless we take the specific example of a branded exception detailed by Wink, if the reasonable expectation is that whatever dollar amount the appraiser sets will be used by the insurer to charge the customer for insurance, then if we also allow that the documentation the appraiser also separately provides will be the substantial piece that determines the nature of the quality of the replacement article, then regardless of the rigorousness with which the text of the appraiser uses to define the background for the number in the valuation, that dollar number will set what the customer will pay year after year for insurance, and that payment will not be specifically tied to the quality of the replacement...instead the description in the rest of the appraisal document will set those distinctions. The quality and price may coincide, but they may not.

Except for where the brandedness of the diamond limits the location for the replacement, I think the amount listed as the value will matter a lot, and the market definition should not matter too much at all...at least if the appraiser will be interested in following the consequences of their work.

So it seems to me.

 

[WinkHPD]

Ira, I think we are both trying to say the same thing but in different ways. Without a complete and accurate appraisal description, the stone can not be replaced in like kind. Without an accurate understanding of the market in which the stone will be replace, the client might be liable to pay very high premiums if he is paying for a Tiffany Price, and he certainly would not want to be locked into Internet pricing if he purchased the diamond at Tiffany''s.

If I had to choose one error or the other I would pay the Tiffany premium and pay a little too much, than to pay a little too little and be underinsured by a few thousand if a replacement is necessary. It would however be better to have a good and thourough conversation with the appraiser and get the appropriate appraisal for the appropriate amount and pay just right for just right coverage.

An appraisal is a LEGAL documument and there are legal requirements in many jurisdictions and no requirements at all in others. There are standards in the appraisal industry however and great guidelines that can be followed. That is all I am trying to say. Without ALL the necessary information the appraiser can not do his/her job correctly. Some do it well, some with all the information in the world will still do it poorly.

Wink

 

[denverappraiser]

We don’t know that the appraisal was done for insurance related purposes.

Assuming it was, the appraiser should go to the most appropriate marketplace for replacement. The branding question comes into play more often than I think you are imagining but let’s assume that the replacement is to be done with a ‘generic’ item with otherwise easy specs in the description.

The usual way for a company to approach the replacement is to send the insured to a jeweler who has agreed to sell to them for previously negotiated prices. They don’t want to wait for the ‘sales’ to come by and will use their purchasing power to get a decent price right up front. They almost never get the opportunity to buy things at closeout or similar distressed circumstances. They use local dealers because most clients prefer to shop with dealers where they can have a showroom to examine the merchandise for the replacement. The replacement process is pretty stressful for most clients and it would be far worse if the company didn’t include this local support. Although the jewelers do this for a discount, it is decidedly not a free service, nor should it be. In the case of expensive diamonds, the company will buy the diamond from a specialty diamond dealer and have the final product assembled at a local jeweler, again for a fee. The valuation question for pre-loss insurance replacement type appraisals is to estimate the appropriate funding for this process in the case of a loss at some unknown date in the future. This is decidedly not a description of the usual way that people shop.

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

 

[RockDoc]

RE: Selection of the proper marketplace(s).

I agree with Neil and Wink here, but I would add that having the expertise to make the selection properly takes advanced appraisal education.

There are quite a few people doing appraisals, that have gotten hold of a proper one and try to "boilerplate" it in to their reports without the proper considerations that someone who does have this training is capable of.

Even in varying specific markets the achieved prices can vary. Market research has to be done by researching acheived comparables.

One of the very common mistakes is the failure of the person doing the valuation that the sale price of that particular item often represents the most accurate and comparable, but this too needs to be factored and considered with relevance to the appraisal''s intended use.

In many appraisals I have seen, there also exists a widespread misundertanding of which value is in the report. I see "insurance appraisals" that define the value as Fair Market Value. I also commonly see the value defined as "Retail Replacement Value", when the insurance policy purchased specifically states that the item is to be replaced by the insurance company''s source, and thus NOT Retail Replacement Value.


Those appraisers here on the forum who have taken and passed the examinations and testing understand these issues. It is certainly a major consideration for the consumer to learn how the appraiser intends to approach their assignment, and discuss the factors with the appraiser that would be necessary to complete the assignment properly.

The methodology of valuation just isn''t something that is learned or understood easily, and to make an attempt to understand all the issues by just reading "partial" comment on the internet, just simply can''t be done. If it could, folks like Dave, Neil, Marty,Cynthia and myself wouldn''t have needed to take these courses in the first place.

Rockdoc

 

[Modified Brilliant]

Some of the appraisers listed are fabulous, some are totally incompetent. I am not as upset about the type of 905 instead of 950 as I am about the huge over pricing. It sounds to me as if your appraiser did not do the appraisal based on the market where it was acquired rather than on a formula markup over cost. A BIG no no in the appraisal world.
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A competent appraiser must be detail oriented and take the time to proof each document.
Appraisers are only human but my feeling is that if an appraisal document has typos, then
the quality of the overall evaluation could be less than desirable. Like any profession, there are
competent and incompetent people. Ask questions, check credentials and make sure that your questions
and concerns are addressed before "choosing" your appraiser.

Jeff Averbook, G.G.

www.metrojewelryappraisers.com