Appraisals for custom settings?

[CaptainCarat]

Hello again all! I had my diamond appraised a month ago or so and it appraised for much higher than what I paid for it. Richard Sherwood was the appraiser so no concerns about accuracy there. I understand appraisal value is a very contested topic on this forum, but I''m curious: for those of you that have had custom settings made (in platinum especially), do the settings themselves appraise for higher than what you paid? If so, by how much?

I''m having some custom work finished up at Quest right now and will be taking the final product to get appraise this week or next week, and just curious on what to expect.

Thanks!

 

[denverappraiser]

Talk to Richard.

The usual question for pre-loss insurance type appraising is to estimate the cost to replace the piece with another new one of ‘like kind and quality’ and in the ‘usual and customary’ marketplace as of the date of the appraisal. In the case of custom-made jewelry where you recently bought it directly from the artist, the usual marketplace is to have another one custom made by the same artist. Sometimes this isn’t an option for a variety of reasons (like if the artist is deceased or their identity is unknown) and it becomes a choice of either replacing it new with the work of a substitute artist using comparable materials or with a used and non-identical piece by that same maker and bought on the secondary market. If the artist is living, available and cooperative, it’s pretty easy. Ask ‘em what they charge and, assuming they tell you the truth, that’s your value. When it gets harder is when an alternative artist is used. This is actually the most common situation and it begs the question: What is ‘comparable’? Similar materials? Similar techniques? Similar technical skills? Similar fame and notoriety? Something else entirely?

All of this involves some decisions by the appraiser and there is no correct answer that can always be given to these questions. It’s a matter of understanding how the valuation was done and what your requirements are as the client. If one or more of those assumptions turns out to be incorrect, talk with them about it. Every appraisal session should contain a discussion of these very issues. Your appraiser won’t always agree with what you want, but they should be prepared to explain and defend their own position. If the valuation is an estimate of what it would be expected to cost at retail to custom make a comparable piece in a local specialty jewelry store, and this is not where, when or how you bought it in the first place, it’s not unusual for the value conclusion to be different.

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