Appraising New Diamond Shapes?

[verticalhorizon]

The topic formerly known as "A Question for Appraisers..."

It was suggested that the title might have been a vague, so let''s try it again. Hopefully one of the resident appraisers can answer.

Do brand new cuts such as the, ahem... J-U-B-I-L-E-E, pose more difficult to asses in terms of value in the appraisal process? What would be the process?

 

[pqcollectibles]

Bump to get you back to the top, AGAIN!!

I'm curious to know as well. How do appraisers evaluate new cuts??!!

 

[oldminer]

There should be no problem, but of course, there is. The rough diamond that makes a new shape costs the same as the rough to make similar standard cuts. The labor is probably similar in the cutting although there may be a bit extra to get the cutters making the stone in the proper manner. It may be a bit more difficult and the advantage of cutting in huge quantity is not there so the pricing is likely to be a bit more just based on development and cost of cutting.

Now comes the part that troubles the appraiser. What amount of money will be spent on marketing and advertising? How much of this is going to be attempted to recoupe in the selling price? A little at a time, or a lot all at once? We don't have a way to be sure unless there are prices published somewhere to guide any of us.

People do pay more for some successful special cuts. Unsuccessful special cuts end up being sold for far less or recut to standard shapes. Just becuase a stone is a special cut does not give it a secure value. It depends on market acceptance and timing just as many other things do.

Have you ever seen "adjusted to market" on the sticker of a desireable automobile when it first hits the show room floor? 6 months later there is a $2500 rebate and no one talks about the people who paid a premium to be "first". Those who paid the extra can feel they got what they wanted or they can feel a little foolish. That's up to them. The same can be said with buying special cut diamonds. You buy them because YOU want them and sometimes price is not the determining factor.... Other things do count strongly for some people, too.

 

[verticalhorizon]

Thank you David! As always, superb answer.

I asked this question for two reasons:

1.) Do appraisers find it more difficult to asses the value of a new specialty cut diamond for insurance purposes?; and

2.) Are the characteristics in appraising value of new speciatly cuts similar to those of standard cuts?

David brings out an excellent point that I hadn't thought of... that being who feels the brunt of the development costs?

This happens all the time in other areas, like cars in David's example or electronics like PDA's and cell phones.

To be the first person that buys one you take on certain responsibilities to offset the years of development it took making said item.

1.) You will most likely pay a premium price for this new item and
2.) You run the risk of being the guinea pig for potential problems.

Now of course, buying a diamond isn't the same as buying a car. There's lots more that can go wrong in a car. (Then again there are lemon laws.)

But can an appraiser, with fair certainty, extrapolate the insurance value of a new cut AND be able to determine the durability of inclusions (say VS2 to SI2) and how it might affect the stone?

In other words, an appraiser can judge girdle width and inclusion placement and give a report on it based on years of experience. Can an appraiser somehow examine a new cut and make the same judgements?

I, of course, will buy whatever I think will be most admired by my sweetie and what I feel is the best value and would be the best performer. These other questions are more for insurance I guess... in the event that an insurance company has to get involved do to loss, theft, or damage.

Thanks again David.

 

[valeria101]

These might be 'new' cuts, but not radically new designs. Changing the angles of a few facets, and such would not change these basic issues.

If you'd want a star-shape diamond or crescent or whatever other odd shape with thin corners and unusual proportiosn, such questions of durability arise. Otherwise... just common sense applies. Cut diamonds are not exactly as complex products as a new type or processor. It's just a polished piece of rock: one type of raw material and a couple of technical processing stages down the road.