Appraised price vs retail price question

[ociopia]

I purchased a gorgeous ring from one of the most respected vendors on Pricescope. I paid $4000 for a 1.10 carat I1 Old Mine cut M color diamond set in an 18 karat white gold setting that retails for $1040 on Pearlman''s.

I did the recommended Pricescope "thing" and took the ring to one of the independent appraisers listed through Pricescope, Vincent Lash, in Churchville, Maryland.

He appraised the ring as a 1.10 carat VS2 European cut M colored diamond, used the $1040 for the setting, and the entire ring appraised for $3500.

He appraised it at that, and as part of that appraisal, he deducted 20 percent for the Old European cut vs modern round brilliant. He went out to websites, found very similar stones, and "checked himself" to show me that he was accurate in his estimation.

He was fascinated that the clarity had been listed as I1 and thought that had been due to reflections of the actual "spot."

As to the "lower than I paid" appraisal, it is 1/8th less - not a huge amount - $500. Is this common? Should I have any concern about it?

I realize we are not talking about a round brilliant and that "cut, polish and symmetry" are not able to really be taken that much into account. This is not a certified stone.

The appraiser was also very clear that his appraisals are for actual retail value. Not inflated insurance appraisals. When I initially received my ring, I also received an appraisal from the vendor of $6700 "for insurance purposes." I am puzzled by the inflated insurance appraisals as I don''t believe they probably do any good should something have to be replaced.

I let my vendor know of the appraisal and their only comment was, "how fortunate for you that we had said I1 when it is a VS2." But I had no intention of returning the ring and did not ask to do so. As I said, I love the ring. It is exquisite.

I''d appreciate your comments. I have an interesting earring appraisal story which I''ll post in another thread.

Sherry

 

[denverappraiser]

He found market comps for a 1.10/VS2/M/OEC at $2400 retail?

I’m not inclined to agree with the strategy of translating prices on modern cuts to prices on OEC’s by blanketly applying a 20% discount and I think you are likely to find it difficult to replace at this price should the need arise. Perhaps the market in your city is different from mine. That's his expertise and that's what you hired him to do and since he's the one who has actually seen the goods I'll certainly defer to his judgment. As you’ve observed, he’s not way off from what the dealers are asking for this kind of goods when they have them so, if the purpose of the appraisal was to decide if you got what you paid for, it sounds like this has been answered. You did and then some. A 12% variation is well within the range of reasonable. Congratulations on your new ring.

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

 

[oldminer]

A very strange twist with finding you have a VS2 versus an I1, yet having the appraiser you hired value the ring below your cost.

Appraisers tend to go to the higher side to avoid problems on what is a fair price to pay since prices really are difficult to hit directly on the head. Even the best oif us can''t predict what a consumer has paid because every merchant sets their own level of profit over cost and not even all costs are always constant.

No appraiser will make a comment here on the value of the diamond or the ring without having examined it in person. It is just not ethical to give potentially wrong, theoretical values on unexamined merchandise, but you sure do have a rather unusual set of circumstances.

If you ever find your way close to Philadelphia, I''d be glad to take a look at all your paperwork and the ring and add my opinion to the mix for you. It won''t change the ring, the actual value, or what you paid, but it might put your mind to rest on it. No charge, so long as you let the Pricescope audience enjoy the rest of the story, too. It would maike a good thread to finish.

 

[oldmancoyote]

Date: 1/9/2009 9:21:32 AM
Author: denverappraiser
He found market comps for a 1.10/VS2/M/OEC at $2400 retail?

I’m not inclined to agree with the strategy of translating prices on modern cuts to prices on OEC’s by blanketly applying a 20% discount and I think you are likely to find it difficult to replace at this price should the need arise. Perhaps the market in your city is different from mine. That''s his expertise and that''s what you hired him to do and since he''s the one who has actually seen the goods I''ll certainly defer to his judgment. As you’ve observed, he’s not way off from what the dealers are asking for this kind of goods when they have them so, if the purpose of the appraisal was to decide if you got what you paid for, it sounds like this has been answered. You did and then some. A 12% variation is well within the range of reasonable. Congratulations on your new ring.

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

I think he found them at $3000 - which minus 20% is the $2400 he appraised the OEC at. I just checked a couple of online databases for rounds - coming up with exactly one stone, but at three prices between $2500 and $2800

Whether the "discount" strategy is sensible given the rarity is - as you pointed out - at least controversial (yes, they may be harder to sell, but they are also harder to find), but I''m not an appraiser.

 

[ociopia]

He also used Fay Cullen as that site has old diamonds.

Each of you has made good and valid points. And it is more challenging to value an old Mine cut or an old European cut. And my stone faces up really great. It does in no way appear to be an M except in certain light - primarily halogen-type light. He was shocked it was an M. And its color had a great impact in its value. Just as he was shocked on the other side that it had been given an I1 when he clearly thought it a VS2.

And I wonder what about the ineffable, i.e., the gorgeous factor. How do you value the gorgeous factor? The stone, to my eye, is exquisite.

I appreciate very much those who posted taking the time to do so in such depth. I love my ring.

Sherry