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GIA cert question - is it necessary? Please advise!!

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pepomint

Rough_Rock
Joined
Jan 24, 2005
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Hi All -

I gave my BF the specs (below) of the stone that I want.
He passed the info to his friend who just bought a ring and the dealer said that it''ll cost $8000.
But, if it doesn''t need to be GIA cert and it was some other cert (don''t know which), he said it''ll save maybe $2000.

My question is, I know GIA can cause a stone to be more expensive, cuz I researched and was told that AGS will cost more than a GIA. But, how critical is a GIA cert?

Let''s say I get a stone with a different cert, maybe a European one or something, can I take it to a GIA place and pay for a cert? Or take it to AGS to get a cert? Any idea if this is possible or what the process would be? and cost wise?

After all my research I haven''t considered another other than a GIA or AGS. So, any comment or insight on this would be appreciated. Thank you.

Round Brilliant
E color
6.89 x 6.94 x 4.15 mm
1.20 carat
Girdle: Thin to Medium, Faceted
Culet: None
Polish: EX
Sym: EX
Clarity: VS2
Flour: None
 
Pepomint,

You don''t mention the clarity.

I thinking that sticking with AGS or GIA makes life easier. Comments about saving $2000 from the dealer without one of these certs is at least suspicious. The text here may help, and there''s other posts on this subject. For example, EGL certs are frequently thought to grade softer than either AGS or GIA, and so, although the two certs may provide the same grades for color and clarity, the cost difference will partly be explained by the apples and oranges comparison.

Regards,
 
Thanks Ira. I'll read your link and do a few more searches.
Oh, btw, I did mention that it's a VS2 clarity.
It's under Symmetry and above Flour.

Pep
 
Thanks, I missed that.

You'll see on this board, in either the search by cut database, or the quick search, and also, either by constraining for well cut diamonds, or leaving those constraints open, you will have about a $1400 premium for diamonds certed by other than AGS & GIA (usually EGL). Although this more closely matches what you've already heard than not, from the point of view of the market leveling factors at work, I think much of this difference is thought to be associated with trying to compare apples to apples with the available data, whereby the EGL report is discounted for what is assumed to be softer grading, and where an E VS2 may instead be an F SI1, when graded by either GIA or AGS. Although there are other factors this Pricescope study gets into, the finer distinction is made there, also referred to in the previous link, that EGL USA is expected to grade differently than EGL.
 
Ira - I read up on your links and did some more searches. I found this one post on HRD certs, how it is undervalued. *sigh* just when I thought I know what I want, I get new info that could sway my diamond pick.
Do you happen to know which online vendors carry HRD or EGL-USA certs? I may consider a different cert even though GIA/AGS kind of gives a peach of mind.

Oh, when you say $1400, does that mean if I get a EGL or HRD cert, it would cost me about $1400 to get it recertified under GIA? Thanks.

Pep
 
Date: 7/14/2005 6:23:38 PM
Author: pepomint
Ira - I read up on your links and did some more searches. I found this one post on HRD certs, how it is undervalued. *sigh* just when I thought I know what I want, I get new info that could sway my diamond pick.
Do you happen to know which online vendors carry HRD or EGL-USA certs? I may consider a different cert even though GIA/AGS kind of gives a peach of mind.

Oh, when you say $1400, does that mean if I get a EGL or HRD cert, it would cost me about $1400 to get it recertified under GIA? Thanks.

Pep
Click to expand...
Don''t know where you can find either HRD or EGL-USA certs, and I do think this sort of misses the point, too.

Regarding the $1400 difference, to repeat:

"...the EGL report is discounted for what is assumed to be softer grading, and where an E VS2 may instead be an F SI1, when graded by either GIA or AGS..."

so, looking only at the prices on the boards here, what is called in EGL as E VS2 at what might be $8000, would perhaps be $9400 if called E VS2 if GIA. The point is that if the EGL stone called E VS2 were recerted at GIA, it may come back F SI1 (it''s not clear until it''s reviewed more closely), and so...if F SI1 were satisfactory, you might instead just change your search in the first place to seek out F SI1 certed by GIA or AGS. You might end up paying even then a modest premium, but it should be approx 5% and not much worse, from what I gather. If you''ve got the time, this may be a reasonable strategy. But, from the point of view of wanting to feel confident about the grading of whatever you buy, without having to wait until an appraiser (usually it will go to him rather than to GIA) sees it, going with GIA or AGS is the premium you suffer for that benefit.

Just my 2 cents.
 
Ira - ok, thanks for clarifying on the $1400 mark and focusing in on the point.
Well, I''m waiting for BF to make an appointment with that Jeweler, cuz I''d like to know why he suggested different cert.
And to check out the diamond.

I''ve done and am doing my research before I go, so I can be educated and not be stumped. Thanks!

Pep
 
Ira- Great point about going for the GIA-
You are actaully understating the downside.
When folks simply assume that an EGL grade can simply be discounted by a color and a clarity (EGL E/VS2=GIA F/SI1) they miss a larger more important issue.
Why would any cutter or dealer worth their salt give a 1.20 which they figure GIA will grade F/SI1 to anyone other than GIA?
The answer is usually trhat there's more to hide.
Maybe it's cut.
But the fact is, that in dealer to dealer transactions, a stone purported to be an 1.20 E/VS1 without a GIA report can be worth 50% less than a diamond GIA grades E/VS1.

PS- Small but important point-
GIA does NOT "certify" stones- or people.
The word "certify" and "certificate" imply that GIA is somehow endorsing a person or diamond.
GIA themselves told me this.
 
RE: EGL HRD GIA and AGS


Yes, it''s apparent that a diamond graded by EGL commands a lower price.

We also know that generally a GEM Trade Lab report ( GIA) brings a higher price.

We also have reasonable "track records" to indicate that AGS diamonds may bring even a higher price than GIA ( but for fancy color diamond grading reports GIA is "still the king")


But why does this occur? This is what needs to be discussed. In addition one has to apply simple business logic as well.

Attaining the most attractive grading

There is a serious consideration by sellers, to post the highest quality diamond they can. The people who most commonly purchase lab reports are the cutters and dealers of diamonds that sell to brokers and retail stores.

When a consumer become basically educated about the 4 C''s, they generally make a decision as to what size, clarity and color they want. Those that become a little more knowledgeable also factor in cutting proportions.

Let''s say we have a diamond that we want to sell, and we are going to imagine that we are the dealer or cutter here.


Let''s assume that we are super proficient in grading (many are not however) and we "know" what the results from each lab might be. There are dealers who will send a stone to all three labs, and based on the result they prefer just eliminate the other two.

For the moment let''s work with these results:

AGS Clarity - SI-2 Color I Cut grade AGS 2

GIA Clarity SI-2 Color I No Cut Grade ( polish and symmetry Very Good )

EGL Clarity - VS-2 Color H - Proportions reported but not cut graded.

(Note: For some diamonds the differences might not be as the above, Some may be farther apart)

What is the clarity and color grade that looks more appealing and salable? Of course the VS-2 - H

But as a dealer I know I am going to get somewhat less for the stone if I use the EGL report over the others. However at that lower price and the "more desireable" clarity and color I might sell it a lot quicker than if I used the other reports.

I also might list the stone using the GIA report, and using the EGL report as well. In this case they would appear like two different stones. For those thinking that they would only want the GIA report, I''ve got one listed. For those who would consider buying what appears to be a lower priced VS-2 H color, the EGL report might just attract "the bee to the honey".

As far as the AGS report, where the consumer seeking a cut grade would "look", and AGS 2 would not be the most salable stone, so I wouldn''t list it using that report.


There are some other considerations made commonly by dealers too.

GIA takes a while to grade the diamonds they get. Seems to vary from 4-6 weeks.

AGS takes 5 days.

EGL is quick too.

Diamond cutters and dealers are pretty saavy about how they can maximize their sales, price or turn the diamond quicker. Acheiving a higher sales price I think would take priority, but depending on how quickly the dealer or cutter needs to sell (or turn) this merchandise may also be a factor.

But consumers should not assume that what appears to be a bargain is. Dealers and cutters have their own personal business decisions to make. Some prefer selling with possibly getting a lower price in exchange for a quick sale. Others may prefer getting as much as they can for a stone. An analysis and decision is made based generally on what is going to get me the most fot the stone as expediently as possilbe.

Another factor that can have affect on the marketing of a stone, is where and whom it was purchased. The stone might have been bought for a lower price from a private seller, or as salvage from an insurance company and then recut. In these situations, the cutter/dealer may own the stone for a lesser price, and able to sell it for somewhat less for a quick turn.

Cutters and dealers don''t always make money on a diamond. But generally, they don''t fret about it. Sometimes the stone just doesn''t yield the carat weight color or clarity that the cutter assumed before it was cut.

This certainly doesn''t cover all the decisions made by a cutter /broker but in a limited way I''ve wirtten this to inform what goes behind why a stone is offered with a particular grading report or reports.

But do realize that when you''re in business it is necessary to make a profit. Just like an employee hired for $900 a week wouldn''t accept his paycheck if it was only for $ 700.00, neither does a person selling ( which really is the same as working) for less than he aniticpates he needs to make or believes he deserves to make.

Rockdoc


Rockdoc
 
that is a great explanation rockdoc.
 
Rockdoc- wow a very comprehensive overview.
I agree that a 0 cut grade stone with AGS rpeort may bring more than same graded stone ( even if it''s the same cut) with GIA report.
But in the case of everything else- it''s GIA, then...no one.
Stones with EGL reports do not trade at consistent prices, in relation to well cut stones with GIA reports- which do trade at somewhat consistent prices.
In terms of price: if you look at dealer to dealer sales, there''s simply NO bottom for a stone bearing an EGL report.
Let''s take a few hypothetical examples:

1.50 L/SI2 RBC with GIA report. If it was well cut, it could bring about $4500-$7000. With an accurate GIA report.
If it''s sent to one of the laxer EGL''s and gets J/SI2, what is it worth? Probably the same thing, and what''s the big deal.
I''m sure the salvage of poorly cut - and set stones ( which GIA generally wil not accept)- EGL makes a reasonable alternative too.

Now, let''s say a well cut carat and a half round brilliant gets a grade of G/SI1 from GIA.
What''s that worth today?- about $11-$15grand maybe. What would the cutter or dealer think- "let me send this to EGL and get F/VS2"?
What''s a diamond worth graded F/VS2 1.50 by any EGL lab today? $10k? What''s a diamond graded E/VS1 by EGl worth today? Probably $10k
Wouldn''t most people spending $10K on a 1.50 want a GIA report? WOuld someone buy a diamond EGL graded F/VS1 quicker than someone looking for a GIA graded G/SI1?

I also do not buy the expediency factor in high dollar stones- sure, GIA talks in terms of weeks, while EGl speaks in terms of days. If a company has the means to own $10,000 1.50 diamond, they can afford to properly represent it by taking the time of having GIA examne it.

So- if it''s a lower priced diamond, EGL works.
On the finer grades, I advise great caution in buying anything but a diamond with a GIA ( or AGS if you''re looking for 0 cut grade) report.


Rocdock- I don''t know of any dealers or cutter sending stones to all three labs- especially the same stone to all 3! There was a study done by some PS folks doing exactly that- to compare the grades- but as a practical matter, the dealers I know can not afford the time or extra cost to get three reports for the heck of it. Do you know of sellers offering stones with 3 lab reports?
It''s also true that cutters and dealers do not always make money on every stone.
And of course it''s good not to fret about stuff like that. Still, mistakes can literally be out of business- unless you''re among the richest dealers. People with hundreds of millions. The usually DO fret about stuff like that worse than little guys!
 
I basically agree with both RockDoc and yourself, Dave, except for one thing.

I find the EGL-LA and NY labs to usually be no more than one grade lenient than the GIA, usually on the color, and more rarely on both the color and the clarity. I can't remember seeing a more than one grade disparity, such as an SI2 stone which EGL-LA or NY graded as a VS2.

The survey which PriceScope did seems to support this, as well as the fact that a consumer can sometimes get a better deal with an EGL stone than a GIA stone. The market discount on an EGL stone can often be greater than the GIA grade difference would command.

I don't believe that all dealers are sending their stones to EGL just because they think the GIA would grade them tougher. Many dealers are too impatient to wait the GIA's six or seven weeks versus the EGL's week. They can turn more stones quicker using EGL, which often compensates for the greater premium they would get with GIA reports.

There's another factor to considered as well. When I was dealing, I found the EGL to be much more friendly and customer oriented than the GIA. As a salesperson, this always carried a lot of weight with me. I'm sure other dealers feel the same way.
 
Thanks Dave and Rich......

RE: Multiple reports....

I think a lot more of this exists than we are aware of. It is probably more practiced in "borderline stones".

This is particularly true when GIA might grade a stone I-1 - and the dealer knows he will get an SI-2 or SI-3 at EGL.

If the stone is significantly better, it will probably be submitted to AGS, even more than previously because of their grading changes from proportion based to light return performance based grading. It probably isn''t going to help for diamonds with a color or clarity grade that everyone can agree on, but in borderline cases, the potential of multiple reports is a reality.


I do know that when dealers get or think they''ll get a "negative" report from GIA, many times it will be submitted to EGL.

This year I got a stone to check that had both an AGS and GIA report.

Rich... I think you''ll see more examples of color discrepancies with your new SAS. I don''t know if it is possible, but you might ask Leonid, if the stones submitted in the study could be sent for you to compare the SAS color grade with that of the labs. Now that would be a valuable extra comparison. Maybe those stones belong to Cut Nut and he still has them.

Rockdoc
 
Yes- Thanks Rich and Rockdoc!

Rockdoc- I have sen many stones with AGS and GIA reports- in almost every case a 0 cut grade on the AGS.
If the AGS grades 1 or2 ( both lower cut grades than 0) dealers are likely t throw away the AGS.
Same for the borderlione stones you refer to.
I agree, this goes on all the time.
I1 is considered by some ( not me) to be the kiss of death.
SO, a GIA report of I1 promts the dealer to submit to EGL- if they get SI2 or 3 and poof..what GIA report?

BUt submitting to 3 would seem only to make sense for an expeiment of some sort.

Rich- I agree- as far as accuracy- EGL USA- which I used to use- was generally within one grade of GIA.
There was a time when EGL was out to prove something and we were submitting VS2''s which EGL USA was giving SI1.
If you think about it- one grade off or two, it does that matter?
If a lab was thought to be inaccurate by a lot of sellers and buyers, that''s the bottom line.


EGl was easier to deal with generally than GIA.
Quicker mostly.

It''s true that there are some major cutters with huge contracts with EGL and IGI- in many cases this type of stone goes to malls- generally the type of stone which particularly educated buyers- like readers of the board, would not consider.
 
Date: 7/17/2005 8:02:26 PM
Author: RockDoc

Rich... I think you'll see more examples of color discrepancies with your new SAS. I don't know if it is possible, but you might ask Leonid, if the stones submitted in the study could be sent for you to compare the SAS color grade with that of the labs. Now that would be a valuable extra comparison. Maybe those stones belong to Cut Nut and he still has them.
Click to expand...

Yeah, I'm having a blast with the SAS. It's nice to have another "expert" around for a second opinion on borderline stones. The problem is, being a machine he won't argue with me. He just sits there with a smug grin, sticking that spectral graph in my face again and again.

I've nicknamed him "butthead".
 
Rich.....

Sounds like the SAS has a mind of its own! heheh

You named it Butthead? You''re too funny....

ROFLMAO

Rockdoc
 

This borderline grading question is something I see on a near daily basis. Dealers show me GIA graded stones that they are contemplating sending to EGL or visa-versa and they want an independent expert opinion. There’s good money in this for the dealers. In a world where a 10% margin looks pretty good, this is a serious issue. Converting a 2.01 VS1-F-EGL into a 2.01 VS1-F-GIA is worth in the neighborhood of 5% and the only risk is the possibility of wasting the GIA fee if they downgrade it and you have to discard the new report. If you're any good at all at guessing how it's going to come out, this is a fantastic return on a 6 week investment! Similarly, converting a 2.01 SI1-H-GIA into a 2.01 VS2-F-EGL is well worth the trouble even if they have to sell it at a ‘discount’ because of the EGL paper. The same happens between AGS and GIA. Converting from an AGS report to a GIA report is often worth the trouble for a single grade difference. I'm anticipating a lot of this happening with the 'old' AGS000 reports as they become stale because people want the new ones. If the dealers don't think they will see a zero cut grade and they might get a higher clarity or color from GIA then there's no downside to switching labs and there's a bunch to be gained. Not surprisingly, the less desirable report(s) tend to get lost in the process. It's almost unheard of for the consumer, or even the retailer to be shown all of the reports. Meanwhile, the labs are minting money.


Neil Beaty
GG(GIA) ISA NAJA
Independent Appraisals in Denver
 
what if the stone has inscribed girdle? do they remove it before sending the stone to a different lab? i have done this many times with rare coins.i would look for what i think is under graded coins and resubmit them for a higher grade.one time i paid 21k for a gold piece, break it out of the certified holder and resubmit the coin.the coin came back one grade higher and i sold it instantly for 45k. sure beats flipping the coin for a quick small profit of maybe $1000-$1200. i always wonder how often this happens in the diamond business
 
Date: 7/18/2005 2:04:08 AM
Author: Dancing Fire

what if the stone has inscribed girdle? do they remove it before sending the stone to a different lab?
Click to expand...
Dancing,

Girdle etching is an optional service for most of the products of all 3 of the labs we''re discussing. The exception is the GIA dossier, which includes it as part of the bundle. All 3 labs will give the client grading information before deciding if they want to buy girdle etching service. This means that you can send in a stone to be graded and, depending on whether you like the answer you can then choose to have it carved in stone.

Coins are an interesting example of this whole process. There are some intriguing differences. In the case of coins, they are sealed by the lab in a little plastic box called a ''slab''. In order to regrade the stone, either the client or the new lab must destroy the previous slab. This prevents you from sending it to 3 labs and choosing the results that you like the best because the only one that''s still saleable is the most recent. Another interesting difference in the coin business is that the labs have no way to tell if a client resubmits the same coin so if you suspect that a better grade is available you can break it out and resubmit it to the same lab as many times as you are willing to pay the fee. The diamond labs are very skilled at tracking their own work and will immediately know if a stone is resubmitted. Gemprint has been used for this purpose for more than a decade and new products are coming online with similar functionalitiy.

Neil Beaty
GG(GIA) ISA NAJA
Independent Appraisals in Denver
 
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