Appraisal vs. Purchase Price Question

[Meers]

I am in the process of purchasing a diamond and I have a few questions I hope someone here can help me with.

1. How much should a diamond appraise for vs. the purchase price? For example, if I pay $10,000 for a diamond, what should I expect the appraised value to be for it to be a good purchace?

2. If I am looking at a setting that is selling for $3500, how much should I pay to get a good deal? 5% less? 10% less? 20% less?. I read the discussion from a few days back regarding working with the jeweler to determine selling price, and I like the suggestion of asking "What is your best price for this", but how do I know if I should make the purchse? How do I know I am getting a good, fair discount?

Thanks for your help!

 

[homer_j]

First, the appraised value can vary incredibly from below what you paid (if you got ripped off) to more that 2x. For your sake, request that the appraised value reflect a fair replacement value based upon what you think it would cost you to have it replaced. All an extraordinary appraisal value does is increase your insurance premium, it tells you nothing about the actual value of a diamond.

That being said, in order find out what constitutes a "good deal," do some research. Compare prices from on-line listings and retail store listings for comparable stones. Once you think you have a handle of what a stone is relatively worth, then negotiate with the seller. To begin with, enter some specs into the search engine on the pricescope homepage to return a listing of diamonds from on0line vendors. These prices should be considered very good and will be difficult to beat especially from your local brick and mortar jeweler or places like Blue Nile or Mondera.

 

[Meers]

Interesting. Thanks for the information on the appraisal. I have been looking at so many diamonds, but there are just so many dimensions and properties of each daimond that I have been having a tough time comparing prices. I have done a lot of reading as to what are the more important properties, but it is still tough to figure out. I guess when I find a stone that I am seriously considering purchasing I will compare the price to other similar diamonds.

 

[homer_j]

Right. Don't concern yourself at all with an appraisal value until after you have bought a stone, it checks out and you are getting it insured.

 

[fire&ice]

Some designer settings are difficult to find w/ a hefty discount. The retailer is obligated to sell the setting no lower than x. Just a guess...but on those settings probably no lower than a 10-15% discount.

HOmer is right, find out the retail of the setting & see what it is being offered at on-line. That's probably close to your price point.

Good luck. Which setting are you looking at?

 

[kim]

Hi
also remember if you were ever to lose the ring and have to make a claim insurance companies take 30% of of the appraisal value to start off with. So the appraisal will be safe if it is double what you paid for the ring!

 

[Meers]

I am looking at a Scott Kay piece. The link will show you a nice picture of the ring...

http://www.pearlmansjewelers.com/Product.asp?DesignerID=23&ItemTypeID=1&ItemID=1091&start=12

 

[homer_j]

Hi
also remember if you were ever to lose the ring and have to make a claim insurance companies take 30% of of the appraisal value to start off with. So the appraisal will be safe if it is double what you paid for the ring!


Kim: Can you elaborate, why does the insurance company take 30% of the appraisal value. Isn't that what your premium and, if you have one, deductible pay for.

You shouldn't have to let the insurer take a fee for replacing your stone. As for letting an appraiser set the value for double what you paid....I wouldn't go that way. Are you trying to make a buck off of losing your stone or just ensure that you can replace your investment if damaged or lost. Don't pay the extra premium. Get a policy that cuts you a check for the agreed upon replacement value (you can have a say in this) and that allows you to use a retailer of your choice. Run a search on the forum for appraisals and insurance, you will learn a lot about what is available.

 

[Newbie333]

"Insurance companies take 30% of of the appraisal value to start off with.  So the appraisal will be safe if it is double what you paid for the ring!"
-----------------------------------------------



This is a good question... do ALL insurance companies to it that way??


If that's the case, then it makes sense to OVER INSURE... right?


Otherwise, I always thought, why over insure if you just end up paying HIGHER PREMIUMS...


-NB333

 

[homer_j]

If that's the case, then why even insure. 30% of an appraised value that is 2x what you paid is more than half what you paid. Then tack on any premiums you actually paid plus a deductible and you might as well replace it out of your own pocket. IMO a serious ripoff, find a better insurance co.

 

[mdx]

"Insurance companies take 30% of of the appraisal value to start off with. So the appraisal will be safe if it is double what you paid for the ring!"
-----------------------------------------------


Kim
Is that standard practice in USA.
How do they implement it?
Do they just reduce the claim value or arrange a 30% from the vendor?

Seems a bit unfair if you pay a premium that relates to a value, I am sure they would not allow you to reduce your premium by 30% for the same value.

Wayne
Melbourne Diamond Exchange Ltd.

 

[fire&ice]

No, that is not correct about 30% of appraisal.

Insurance companies handle claims two ways. One is they replace the stone w/ like stone regardless of what you insured the stone for. Two, like Chubbs, they give you the full amount you have insured the ring for.

Either way, insure the ring for what you believe is an appropriate amount to replace the ring w/ like ring/diamond. It is very prudent to list *all* characteristics of your stone (dimensions, 4 c's, sarin, crown/pav % or angles, plot, etc.). That way you can be more assured of getting a truly like stone.