diamond pricing

[jollyjack]

Inherited a wedding set. Have two local appraisals that are far apart. Rings are platinum, center round stone is 2.48 carats h color vs11 clarity. side stones are all 1/3 carat vs, h. One appraisal was 16,000 the other 51,000. I no nothing about diamonds,any comments will be welcome. John

 

[diagem]

Date: 3/29/2008 12:21:06 AM
Author:jollyjack
Inherited a wedding set. Have two local appraisals that are far apart. Rings are platinum, center round stone is 2.48 carats h color vs11 clarity. side stones are all 1/3 carat vs, h. One appraisal was 16,000 the other 51,000. I no nothing about diamonds,any comments will be welcome. John

John...,

My suggestion to you is to use one of the PS appraisers (you can choose by clicking the top right link "Resources"..., they will be objective! I can vouch on that!

Good luck,

 

[strmrdr]

badly needs too be cleaned, neither of the appraisers cleaned them before looking at them?!?
or has it been a while?

See if one of the PS listed appraisers is close by as DiaGem recommended.
If one isn't listed you can start a thread listing where you are and ask for recommendations.

 

[strmrdr]

If the stones are as you listed both appraisals are off...
pulling numbers out of my hat and based on PS search for similar stones.. $36k Internet $42k b&m for an insurance replacement cost would be about right for the set +/- a few k.
But get an appraisal from a good appraiser don''t go by my numbers!

 

[denverappraiser]

They agree on the description? Do they agree on the value definition? Is this set a new purchase? Ruling out the option that one is simply a typo or math error, my guess is that they are answering different questions.

Any statement of value has to have an element of what something is worth to whom, when and under what circumstances or it’s not useful information. This is known as the value definition and it should be clearly stated in the report. For the majority of appraisals, this definition is something on the order of: The expected funding required to replace the item with another new one of like kind and quality in the local retail marketplace and in a reasonable amount of time.

There are lots of qualifiers in that sentence that can make a big difference in the value conclusion but there are also other definitions that can produce very different answers. For example, ‘What can I expect to resell this for to a dealer?’ is a perfectly valid question that will usually have a quite different answer.

One easy test that you can answer for yourself is to take the description on the primary diamond and enter it into the box at the top of the page titled ‘pricescope your diamond’. This answers the question “What does one like that cost from the dealers here?” This produces an estimate of about $30k for the center diamond in a highly competitive marketplace. It’s a little hard to shop the rest of the ring because it’s custom made to fit the diamond but you can even surf through the websites of the dealers and I think you’ll find that this will require a budget of, say, $4k-$7k depending on who makes it and the details of the description. This ends you with a budget in the mid to high 30’s, here, today.

Most stores are a bit higher pricewise than the folks here so you’ll find that ‘replacement’ type appraisals like I described above will come in at anywhere from 10% - maybe 50% above what you see here depending on the market chosen so that estimate for $51k seems at first blush to seem fairly credible if a little on the high side. The other does not, at least not for this type of appraisal. It might be for something else. Cash resale value to dealers, for example, will usually be based almost entirely on the center stone and they are often half to ¾ of the prices you see dealers selling for here. The sales value of the mounting will be based purely on the salvage value of the materials. Given the description, $16k seems a little on the low side but not way out of line for this kind of value. Even a slight variation in the description could explain the difference.

Read the fine print of each appraisal. The value definition being used should be clearly stated in each one although sometimes it's buried in the legaleze. If you can't figure it out, call up the appraiser and ask them. Understanding what they've told you is part of what you are paying them for.

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

 

[jollyjack]

Hello again, both appraisals were for replacement cost. Rings are fifty plus years old. I took the pictures in angled sunlight. I am looking for fair market value for ebay or craigslist. I realize that there is a huge price markup in diamonds. I think I will go to one of the official diamond appraisers in Minneapolis for an unbiased appraisal. Thanks for your comments, John

 

[denverappraiser]

John,

Please come back and let us know how this works out. If you don’t mind me asking, what is an ‘official diamond appraiser’, how is this different from the two opinions you already have and how do you plan to decide if their opinion is unbiased and more (or less) valid than the other two?

Are you looking for informed advice on how to maximize your sale or for a sales tool to be used in an advertisement? These are considerably different questions but people often confuse the two. Dismissing all of the issues as being a matter of 'a huge price markup on diamonds' is a way to guarantee that you will do poorly in the marketplace. +/- even 10% on your deal is quite a bit of money and it strikes me as being worth some effort to do it carefully.

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

 

[jollyjack]

Thanks Neil, I want an appraisal that will be recognized as a legit value. Anyone buying this type of ring will want assurance of value. (by official appraiser I was refering to the ones listed in the resource tab on this forum). BTW both appraisals were the same for size, clarity and color. Only differance was replacement value. The jeweller with the high estimate gave a fair market price of 28,000. Lots of different prices. I want to find a fair person to person selling price. John

 

[denverappraiser]

Any buyer with sense is going to hire their own appraiser without relying on something provided by you, even if it turns out to be correct and no matter who issued it. That’s just the nature of doing business with strangers. It’s like listening to the advice of the other guys attorney in a court case. That said, you still have two very valid questions. What should you be asking and what should you do to maximize your chances of getting it within your limitations (marketing budget, time constraints, etc.)? For example, in most cases like this it will be easier to sell with a GIA report on the center stone. This is a bit of a pain to get but the payoff is pretty high on consumer-to-consumer sales of large and fairly high quality stones. To do this, someone will need to pull it out of the setting, submit it to GIA and then reset it when they’re done. Has this been suggested or discussed? Are the rings soldered together? If so, it may also increase your marketing ability to separate them and the cost will be nominal. It sounds like at least one of the appraisers is being fairly straight with you so again I’m still curious what is gained by adding a 3rd one to the mix. Presumably you’ve had this conversation in order to get the $28k number (yet a 3rd value!) and have decided not to trust their advice. Why?

There’s nothing 'official' about being listed in the database here although I do think it’s one of the best places going to look for an appraiser. To get listed you need to claim to be qualified, you need to claim to be independent, you need to not have many complaints against you and you need to ask. It's even free. I’m not picking on the appraisers here, I’m proud to be in that list, and I don’t know either of the listed Minnesota guys but at the same time this is a pretty low bar. Before you hire a third expert I recommend you do some research into picking the right one. You may already have them. Appraisers are not all the same as you’ve already discovered but you'll get better advice if you choose one that you consider to be reliable rather than trying to work out some sort of a consensus.

By the way, watch out for the term 'fair market value'. This is a legal term and it doesn't mean what most people think.

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