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Encouraging appraisers to do the tango, like only they know how to do...

Discussion in 'RockyTalky' started by Regular Guy, Nov 2, 2004.

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  1. Regular Guy
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    by Regular Guy » Nov 2, 2004
    In previous discussions, the question has arisen, as to what an appraiser will tell you about the stone he or she has been paid to review for the client.Appraisers have commented that they will be perhaps reluctant to say: “I would not buy that stone,” understanding it was presented with the good hope it will be the winner they want…or…in some fashion, because they will feel reluctant to attach a go/no go standard to the purchase decision.


    I’m suggesting that we help them to tell us what we want to know.




    This is an idea and suggestion for implementation.But…the hope is that it could help to solve one piece of the problem for some diamond buyers who would like to use the internet, and who will even use an appraiser from afar.In doing this…because local resources are limited for diamond sellers that you’d want to go to, and for that matter, the options for using a local appraiser are limited, too (perhaps because they don’t employ the equipment you’d want them to use, like sarin and other things), what you’d like is at least one person to look at the diamond you’ve done an almost final decision on….to tell you if you should buy the darn thing, or keep looking.


    Everybody’s got constraints….even “independent appraisers.”Although they are independent, I believe the evidence based pattern is that you will see them once, they’ll evaluate your diamond, and you’ll buy it….with the decision essentially having been made on the relative fundamentals once you select it to send to the appraiser.So…I’m suggesting a new model. It’s been recommended as a strategy, I believe, by Jonathan at Good Old Gold.And it involves developing a relationship with an appraiser where it can be anticipated at the outset that there’s a possible expectation that the appraiser will actually see several stones on your behalf before you make a purchase decision.Of course, maybe you’d get it right the first time.But you’d like to think that given most people’s non-expert skills at diamond buying, that for 10 instances where Joe Bloe gets their diamond reviewed by an appraiser…in as many as 5 of those times, the recommendation would be to – go fish – try again!


    No one wants to be a patsy, spending thousands of dollars on a purchase decision that they think will be less than ideal.Maybe you’ve already decided to use an appraiser’s services, if only because, in the end, you want a serviceable appraisal for insurance purposes, and one that’s priced right, assisting you to make reasonable payments for years to come.


    The suggestion: get your appraiser to agree to the Patsy test!


    That’s: Pricescope’s Appraiser Tolerance SurveY….or the Patsy Survey.


    Ordinarily, an appraiser would do three of four things you might like them to do for you 1) They’ll confirm that a diamond is a diamond, not a piece of glass, or something else it’s not supposed to be, 2) they’ll describe it’s qualities, in the many ways they do, 3) they’ll provide you an appraisal you can take to an insurer to insure it….but what the Patsy survey asks them to do is one more thing…which is to give you some go/no go advice.


    This advice, perhaps in the form of a survey, could be represented this way…


    For any given a) price, and b) distributor type (B&M, internet vendor, pawn shop)….the appraiser would him or herself….c) make an affirmative purchase decision…


    1)As an engagement ring for one’s spouse



    2)As a nice gift for one’s spouse



    3)Would not make that purchase decision, of that item.


    Given a, b, c they would select: 1, 2, or 3, which is the no go choice.


    In order to assist a) their participation in the survey, and b) the usefulness of the instrument…a few related suggestions:


    A – pricing


    If they agree to have the survey as part of their workup in their work as an appraiser, their charge may be slightly higher.Ideally it wouldn’t, but it might.


    And since you’d want them to actually feel encouraged to tell you to…go fish…as necessary, you would build in pricing that would encourage use # 2 from them, and #3 from them as well, with each being perhaps lower than the next.Perhaps a second or third swing at the bat would be at 2/3 pricing.


    So, use #1 might be $150, use #2 would be at $100, use #3 might be $66.Probably after the 3rd use, if – based on the appraiser’s advice, the buyer still hasn’t found a winner, the reduced price would be stable at that amount, or the buyer may intentionally walk to another appraiser altogether.


    B) Evaluation


    I'm not sure who should monitor this sort of thing, but without regard to that, you would want to know, in selecting an appraiser based on the Patsy test, what their Patsy score was.The score is based on the average number of times they provide services to a customer for a single purchase decision.Typically, the range would be between 1 and 3 uses.For the more experienced Pricescope reader, who would think to ask for the Patsy test, the sweet spot score might be 1.2 - 1.7.For a more general crowd, I'm thinking it would be more like 1.4 - 2.1Users should consider asking their appraiser what their Patsy score is!


    C) Fitting the appraiser into the buying process



    The point of using the appraiser this way is to allow the buying process to happen away, largely.But, you'd like some kind of local control.This should come after the ring comes back to you, having been viewed twice by the appraiser....first unmounted, agreed as a "go" decision, then again after being mounted by the jewler, and then to you.Only after its been viewed twice by the appraiser and mounted, would you get to see it for the first time.It's suggested that it be agreed that your time to return the ring could begin then, when you get it, otherwise...you are stuck.So the jewler must be on line with this program, as well.





    So, maybe it’s just a wild hair (hare)…what do you think?




     
    


    


  2. Regular Guy
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    by Regular Guy » Nov 2, 2004
    Dave,

    I''m not sure I see that; maybe you can explain.

    Their main obstacle to having a clear statement, if you believe it, would be the motivation for taking a second shot. But, they''d be reimbursed at a lower rate.

    Still, they might go for the second shot to get a better relative Patsy score. Not necessarily a bad thing, for the buyer''s interest.
     
  3. Iceman
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    by Iceman » Nov 2, 2004
    Try relating the whole thing to cars and car dealers or not :)


    Its all an educated opinion and what is worth anyway? There are about a 100 ways you can put a value on a diamond depending on mode. There is a different price for Insurance; there is a different price for a Divorce settlement as well as liquidation of an estate and fair market value. I look at all the cutters and they as a group are not even consistent on price. I can find one diamond and it may vary as much as $5000 between diamonds depending on who cut it and overhead as well as what they bought the rough for and how long ago. Jewelers and appraisers dont even know the bottom dollar on diamonds. If you pay cash and not memo then its a different price and so on.

    I hope this helps a little, if I understand what you wanted.

    The Iceman
     
  4. Regular Guy
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    by Regular Guy » Nov 2, 2004
    Iceman,

    Frequently, I hear from appraisers that you want to be clear with them regarding what you want from them.

    I''m suggesting this item 4...a go/no go decision is something you may want real feedback on, and I''m proposing a "paper tiger" instrument to get this result.

    Although in standard practice, by getting an "appraised value," you can make your own assumptions. Still, you''re not, in this way, getting any real sense of how much better you could have done....have you optimized. In particular, given a given set of constraints (price point and marketing channel), would your appraiser make the same decision.
     
    


    


  5. Iceman
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    by Iceman » Nov 2, 2004
    I see what you want and it will never happen.



    Ask for a fair market appraisal. That will tell you what its really worth. You dont want an inflated I feel good, go buy it from the mall appraisal price you want to know what its worth . Fair Market ~ willing buyer willing seller. If you had to turn around and sell it worth.

    The Iceman
     
  6. noobie
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    by noobie » Nov 2, 2004
    Ira,

    Nice idea, but how do you reconcile the personal preferences of a cusomer with the appraiser? An appraiser is supposed to give you an impartial evaluation of the goods based on generally accepted industry and profession guidelines. How those guidelines match what you want is up to the customer.

    For example, if I''m trying to find the absolute best of the best, that''s one thing. If I want to sacrifice something, clarity, color, size, cut than only I know what the limits of sacrifice are.

    My personal example: I had two stone brought in an SI1 G and an I1 G. The I1 was substanially bigger but around the same price. Both were keepers in their own right, but which one would the appraiser tell me to send back? It was my decision based on my trade off variables.

    I see it as hiring a consultant. They provide you with expert advice and opinion. You need to decide how you use the advice. I do however agree that perhaps they should be more clear and explicit in benchmarking the stone with what is considering industry ideal.
     
  7. strmrdr
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    by strmrdr » Nov 2, 2004
    hmmm you seem to be talking more about a buyers agent than an appraiser.

    Frankly I want the appraiser to give me the info in plain english and make sure I understand it and let me decide.
    In other words the appraisers job as I view it is to clearly and fully document the item.
    Then set an opinion on the value.
    Then explain that document and value.
    Then answer questions.
    One of those questions might be should I buy this diamond?
    Any appraiser that says yes or no to that one is an idiot.

    A better question would be my expectations were .................. does this diamond meet them?
    That is a question an appraiser can answer.
     
  8. Regular Guy
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    by Regular Guy » Nov 2, 2004
    Noobie,

    If you want an opinion on this....provide constraints as you have them.

    If you know you want: G, VS2, well cut....you tell them.

    Based on whatever constraints you know you''d like to accomplish, get the simplicity of a go/no go for a second opinion.

    Of course, if a dialogue is necessary, pick up the phone. If they ask you..."how well cut do you need it to be"....maybe you have some information to go on right there.
     
  9. noobie
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    by noobie » Nov 2, 2004
    Ira,

    If a cert validation and price comparison to wholesale is what the customer is after, then sure. But not all VS2 Gs are equal. And maybe I don''t really want a VS2 G.

    I think this is an oversimplification of the duties of a good appraiser. I expect more and then I''d like to decide for myself. But to each his/her own.
     
  10. valeria101
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    by valeria101 » Nov 2, 2004
    Second that. An "appariser" that reviews a few stones on behalf of a customer is a seller. What is different from here from the position of a retailer selecting diamonds from a list once a customer asks for specific goods ?

    Actually, if you go to the "Local Jewelers (beta)" link above, you may discover that the respective proposition is not very far from what I understand you describe. Basically (IMO as usual) buyers are invited to make a narrow selection and then ask a local jeweler to descend that diamond from the web for inspection. I bet appraiserd could sometimes do the same, bar the expected follow up with maing a setting for the stone.

    Jonathan has long had the H&A search engine and an offer for "drop ship" aside his usual super analyzed diamonds. Sounds like a good idea - probably not the average type of transaction right now, but definitely available.

    For colored stones, Palagems makes a similar invitation: look at the website and ask yur jeweler to ask us for a quote. The guys do not undercut fellow retailers and deal by deal the buzz grows.

    Sounds good ?

    At least at first sight... and from the buyer''s point of view.


    Just my o.2, of course. [​IMG]
     
    


    


  11. RockDoc
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    by RockDoc » Dec 28, 2005
    Corey.....

    FMV is a wildly exacting value. A consumer purchasing a diamond whether it be on the internet or a store or other venue does not have FMV requirements.

    FMV is NOT necessarily what a willing buyer would pay a willing seller. This is far too generic a "title" for the willing buyer /vs willing seller" valuation approach.

    More correctly, what you are defining is Market Value.

    For anyone who like an article that I wrote some years ago about this, email me and I''ll send it to you.


    Here''s a little "test question" for all who have an interest. What does the word "FAIR" in Fiar Market Value actually mean?

    Rockdoc
     
  12. valeria101
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    by valeria101 » Dec 28, 2005
    One take:

    ... each party's action is optimal given the actions of others; neither party has reason to turn away from the deal when done. (~ the Nash definition, loosely)
     
  13. Modified Brilliant
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    by Modified Brilliant » Dec 28, 2005
    "Fair" means unbiased or equitable. Fair market value is a legal value term. "Fair" refers to a public marketplace. These are the simple answers. Of course, there are much broader and complex definitions.

    www.metrojewelryappraisers.com
     
  14. valeria101
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    by valeria101 » Dec 28, 2005
    Wouldn''t that always be less than paid (unless the purchase was made under similar conditions - i.e. private sale) ?
     
  15. valeria101
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    by valeria101 » Dec 28, 2005
    Legal term... of course. And that is what counts in the context.

    I just took one from my own ''comfort zone'', and that would not count as much practically.
     
    


    


  16. aljdewey
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    by aljdewey » Dec 29, 2005

    I personally cannot see where such a system would truly work.


    Problem 1: As Noobie mentioned, there is no way to account for customer preference (visual and balance of the Cs).


    Problem 2: An appraiser''s job is to evaluate the elements of the stone; I don''t think they can remain unbiased if they start offering opinions on whether or not to purchase. Even though most appraisers are on the up and up, it opens the door to possible collusion, etc. Even the possible appearance of that would be distasteful to those appraisers who are ethical. It''s a path I cannot imagine appraisers would want to embark on.


    Problem 3: The proposed pricing model for repeat appraisals has potential to taint the objectivity of the results.


    If I''m the appraiser in question, I could do 3 new appraisals, let''s say at $150 each, and make $450 for those 3 hours. Or, I could spend those 3 hours doing 4 separate appraisals for one person and make $150, $100, and 66. That costs me nearly $150 out of my pocket for doing the same amount of work. Why, then, would I ever want to tell someone not to go with a stone? It hurts me financially.

    Problem 4: Your stated objective is to help "diamond buyers who would like to use the internet and an appraiser from afar", and you''re proposing that the appraiser would actually see several possible stones for you before making a purchase decision. So if I''m the customer, your proposed model also involves me paying a blue fortune in shipping costs! Sheesh....there has just been a 3-page long thread because someone didn''t want to pay 2-way shipping on one lousy stone......didn''t want to pay $65 on an $11k purchase, and your proposal is for folks to ship 3-4 or more stones back and forth at their cost? Wouldn''t fly for me as the customer.
     
  17. Regular Guy
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    by Regular Guy » Dec 29, 2005
    So, this is an older post (see the start date), done mostly for fun, but with a point...and where the culture of the time it was originally made probably pointing to the complaint that appraisers tended to be "yes" men or women, liking everything they see.

    Two points, now, in response to yours, Al.

    A) Re your problems 1,2 & 4...it all comes to the client's motivation for why they would go to an appraiser in the first place. Let's clear away details of language, that may have been clarified recently by Denver Appraiser in his sample query that could reasonably be brought to an appraiser:

    "#18. I’m paying XYZ for this stone along with the following attributes that I consider valuable. My criteria is ABC and my concerns are 123. If I continue to shop, am I reasonably likely to come closer to my requirements for a lower price?"

    Generally, regardless of the problems associated with getting to the answer...if you want to ask yourself...why I am going to an appraiser anyway, if the answer goes beyond merely to confirm that it is a diamond, and to get a serviceable piece of paper to bring to an insurer, you have to figure out what kind of advice you will want from the appraiser, and what the expected consequences are of same. If you're 99% sure of your choice, it's just the confirmation and paperwork you want. Let's say broadly, even excluding yourself as a diamond chooser, let's say you think it's likely, in the best case, a person should only expect to be 2/3 sure of optimizing. Do the math backwards (divide 1 by 2/3), and you want to consider employing an appraiser where the data associated with his work reflects your rational view of the world, in which case he may have a Patsy score of 1.5. Is this point even vaguely clear. This is the macro view.

    B) The micro view is the pricing model, and your problem #3. Basically, consistent with the macro view, you neither want to encourage him to say no all the time (we predict he's not so overflowing with business that he's constantly on the clock) at full price, so the disincentive is the lower price for follow-up uses. But, the follow up uses must be priced high enough to make sense for them to at least consider saying no, again, instead of just yes to get it over with.

    Anyone tuned into this concept to offer an opinion about how pricing should work for an idea like this? Jonathan at GOG actually has the idea in principle discussed at his site, too. You want it to be rational, you know.

    Bottom line, the appraiser should want to have a good Patsy score at the end of the day, and this would serve as a criteria for some users to pick that appraiser over other appraisers. No one wants a yes man.
     
  18. aljdewey
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    by aljdewey » Dec 29, 2005
    Well..........trusting my own sound judgment seems like a better prospect for me. I hired Rich Sherwood, and I''d do it again in a minute.

    Even without a Patsy score, I was confident in the veracity of the results he provided. [​IMG]
     
  19. Regular Guy
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    by Regular Guy » Dec 29, 2005
    Not my point, Al. The Patsy score is designed to ask the question, presuming he's always right, in what circumstances he will judge the average client's pick to be non-optimal.

    The judgement goes, really, to how well you think the average client will do. And then, his response to that.

    Separately, although it's always hard to do self analysis, the interesting point of your going to him in the first place is on the marginal chance you've picked wrong, from ultimately your point of view, and you want him to be available for his assessment of that.
     
  20. aljdewey
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    by aljdewey » Dec 29, 2005
    That''s where the benefit of a little homework comes in, Ira.

    That "marginal chance" you refer to is all but minized by 1) sound judgment backed by 2) a little diligence. Combining both, I felt very confident that "marginal chance" was all but eliminated.

    The system you''re trying to develop would really appeal more to those who aren''t confident enough in their own judgment/research skills, I think.
     
  21. solange
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    by solange » Dec 29, 2005
    I have no problem with the highly regarded appraisers who frequent this forum. After an unsaisfactory experience with a diamond district appraiser-on a previous post,I will now send my jewelry to one of them or make the long trip.

    The problem, and I know Leonid is going out of his way to correct this, is that some listed appraisers do not adhere to acceptable standards.

    I had a specific agreement with the one I used--they even identified themselves here--where I would be there when the package was opened and present for the appraisal. I came up within a short time of them notifying me that they had received the stone.

    I called from a cab stating i would be ten minutes late--it is NYC and i was stuck in a traffic jam and by the time I got there the package had been opened and the appraisal done and signed by his former assistant--just recently delisted from Pricscope after he went out on his own and there was a complaint from a Pricescope customer. Apparently Garry syggested looking into his credentials and now he is gone.

    Now the new assistant says it is against thier specfic policy to open a package without the customer being there and the appraisal is to be done in the customer's presence. How could they make such a mistake on a 4.10 carat stone when they now state it is their specific policy not to do so and the customer has notified them she is on her way? How can you find a trustworthy appraiser except for the few well known ones here? If they are negligent or ignore instructions in such a major part of the appraisal, how can they be trusted with anything else no matter how caeful you are to specify what you expect.

    No matter what you agree to, if they do not set standards and abide by them, nothing will change them into someone you can rely upon. You either adhere to high standards because that is the way you run your life, or you try to get away with as much as you can.
    Date: 12/15/2005 12:06:49 PM
    Author: smarty33
    solange,

    I am writing as a representative of the firm which, I am informed, carried out the appraisal to which you are referring. I am neither the appraiser in question nor the assistant mentioned. The appraiser is, at this point in time, on assignment in a sensitive part of the country and has no access to the internet and therefore no means by which to respond. The assistant is no longer with us. I have spoken to the appraiser at length about this concerning issue but given the time that has lapsed between the appraisal date and now the recollection of events is limited. In addition, I have not seen the appraisal in question. I do not know your name nor do I know the date on which the appraisal was carried out. I am writing in response to this issue only. We are not the firm cited by the original post in this thread.


    OK, that out of the way. I want to offer my sincerest apologies for your unsatisfactory experience. It is absolutely not our normal practice to open shipped items without the client being present. Furthermore, it is absolutely not our normal practice to conduct appraisals in the clients absence without their expressed permission. I can offer no excuses why this happened in your case and to speculate would be pointless. I can assure you though that there was certainly no copying from any of the documentation that accompanied the diamond. A full verification of identity & quality would have taken place. The fact that the information offered in our report matched the information on the accompanying documentation merely serves as testament to the accuracy of these documents. The verification process takes, at minimum, 1 hour to complete. After which there is further time spent on editing and production. With questions and answers the typical total time for a verification of this nature would be no less than 2 hours. Of course you could not have known this having not been given the opportunity to bear witness to, and participate in, the process. If a value is requested in addition to the verification of quality then further time is required to accurately research the marketplace and for this we must charge an additional fee. There is also an issue liability associated with putting a value on an item. This should have been clearly explained to you when we were asked “if the stone was worth what I paid for it”.


    We pride ourselves in the services we offer and indeed base our business around repeat appraisals and referrals. The compensation we receive for our services is merely a reflection of the marketplace in which we have chosen to operate. Satisfaction of our clients is absolutely paramount and comes before time and money. Indeed, without client satisfaction we will cease to exist, have lots of time and no money! You were clearly not satisfied with your experience and to this end I would like to offer you one of two things - either 1) A full refund of the fees paid or 2) a complimentary appraisal (inc. replacement value) conducted in your presence.


    Respectfully yours,

    I do not want their free offer of an appraisal, a refund or any further contact with them.
     
  22. strmrdr
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    by strmrdr » Dec 29, 2005
    My opinion:
    An appraiser isnt and should not be a replacement for doing your homework.
    They are a check/balance to the vendor and lab at best when it comes to a buying decision.

    There function is to:

    A: accurately describe the item including any defects and any positive points.
    B: provide a value for your insurance company to write a policy on.

    It is up to the consumer to take that information and use it one way or the other.
    An appraiser making the buying decision for a client is way too open for abuse.
    Its a slippery slope open to way too many problems.
     
  23. Modified Brilliant
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    by Modified Brilliant » Dec 29, 2005
    Strmrdr....very well stated and I am in agreement. I always recommend having a brief discussion with a client via e-mail or on the phone regarding any expectations BEFORE the appointment is made. Under no circumstances should a client walk away from an appointment unsatisfied that their questions and/or concerns were not addressed properly. No appraiser is perfect but at the end of the day, we should feel that we did our very best for each and every client.

    www.metrojewelryappraisers.com
     
  24. solange
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    by solange » Dec 29, 2005
    I had done all my homework on the stone and spoken to the appraiser as to whatiI required
    This does not address the fact that this appraiser disregarded his own policy and agreement with me at the admission of his own assistant.
    All I really needed was verification that it was the stone I had purchased. And since he had completely disregarded our agreement as to opening the package before I got there and spent so little time with me or with the stone for the price iI paid him, I thought it was unreasonable for him to ask me for yet another $200 just to verbaly tell me if the stone was worth what i paid for it since i had already paid $210 for what I felt was a wse of my time.
    The point that I am trying to make is that one has to shop more carefully for an appraiser you can have some confidence in. If you catch them in one infraction, how can you trust them with anything else. And what is the point of going to an appraiser if he does not keep his word?
     
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