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Help pricing grandmother's 3ct diamond ring?

meandmyarrow

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Hi everyone, I need some advice for determining the resale value of my grandmother’s engagement ring.

My boyfriend and I are ring shopping, and we’re considering this ring (so much sentimental value, plus it's beautiful). It’s owned collectively by mom and her siblings, and we would have to buy it from them for a fair price.

It was appraised last year for just over $95,000. This was an insurance appraisal for retail replacement value. The appraiser is a Graduate Gemologist (GIA). He said it could be sold for "maybe a third."

It’s a classic solitaire with two baguettes, set in platinum. Likely from the 1950’s. Here are the specs:

Center diamond
Round brilliant cut diamond weighing 3.04ct.
Clarity: VS-2 to SI-1
Color: D - E
Cut: Very good

Baguettes
Total weight of two: 0.44ct
Clarity: VVS-1 to VVS-2
Color: D-E
Cut: Very good

There are no lab certifications, and this appraisal is all the information we have. How do we determine a price that is fair to both us and my family? Is it safe to say the resale value is one third of the appraised value ($31,000+), or do we need more information? Could this figure be significantly higher or lower than what this ring would actually sell for?

Do we need to have the diamond GIA certified to really know? I’m worried both about removing the diamond from the setting and the time it would take to have this done (we’ve been ring shopping for months and we’re somewhat impatient).

I didn't know anything about diamonds until I started researching a few months ago. Any guidance would be very much appreciated.
 

denverappraiser

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Depending on your strategy for how to sell it, a GIA report on the stone will almost certainly be helpful. If you're planning on retailing it yourself directly, it's essential. The problem is that grading. Your buyer is going to assume the worst. VS2-SI1 means SI2. D-E means F. Etc. 1950s will be taken to mean cut Good or Fair. These are all GIANT topics.

Retail replacement value has nothing to do with it.
 

denverappraiser

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Talk to your appraiser about all of this. This has the potential to generate giant bad blood within the family that can haunt you forever and you really need an appraiser who both understands the questions and is prepared to give you a straight answer. If they're not prepared to do it, find a different appraiser. "Maybe a third" is not a straight answer. Get it in writing.
 

tyty333

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denverappraiser|1462899318|4029832 said:
Depending on your strategy for how to sell it, a GIA report on the stone will almost certainly be helpful. If you're planning on retailing it yourself directly, it's essential. The problem is that grading. Your buyer is going to assume the worst. VS2-SI1 means SI2. D-E means F. Etc. 1950s will be taken to mean cut Good or Fair. These are all GIANT topics.

Retail replacement value has nothing to do with it.

I think she is saying that they are the buyer...not selling to a third party. She wants to know what would be a fair value to set
to pay off her mom and mom's siblings. It would be nice to send it to GIA but that means you have to have the stone pulled.
 

Rockdiamond

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There's really no way to answer the question fairly to you- or your mom and aunts/uncles without pulling to the stone and sending it to GIA.
AS Neil mentioned the "spread" in grading- whoich is entirely reasonable given an appraisal done while the stone is mounted- can half ( or double) the price based on where the actual grade falls..
3ct colorless diamonds are very costly today.... how costly depends how colorless, the clarity and cut.
 

denverappraiser

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tyty333|1462905325|4029867 said:
denverappraiser|1462899318|4029832 said:
Depending on your strategy for how to sell it, a GIA report on the stone will almost certainly be helpful. If you're planning on retailing it yourself directly, it's essential. The problem is that grading. Your buyer is going to assume the worst. VS2-SI1 means SI2. D-E means F. Etc. 1950s will be taken to mean cut Good or Fair. These are all GIANT topics.

Retail replacement value has nothing to do with it.
I think she is saying that they are the buyer...not selling to a third party. She wants to know what would be a fair value to set
to pay off her mom and mom's siblings. It would be nice to send it to GIA but that means you have to have the stone pulled.
I understand. The problem here is in defining terms. She wants to know what they could sell it for, presumably in an arms-length transaction to a 3rd party. That way everyone is treated fairly. That’s a reasonable way to do it but it brings up all sorts of questions that have to do with that hypothetical 3rd party transaction. I just listed a few.

Some people are a lot better at selling things than others. That’s not a gemological property. Is the desired value the price they could get from a pawnshop that’s close to town or the price that an expert salesperson could hope to get given plenty of time, advertising money and luck to make the deal? Those will differ by a factor of 2 or more and both could be called ‘resale value’.

What about those grades. No one other than possibly the grader themselves will rely on that grading to make such a purchase. It’s likely the grader didn’t tell her this. A dealer bid on an approximate 3.04 carat, SI, F-G transitional brilliant is going to be less than half the bid on a GIA graded 3.04/VS2/E/VG. These are not tiny details and they are both well within the range of the facts given.

This is not the sort of thing to answer casually. If mom/siblings think it’s ‘worth’ $95k and the OP offers $31k because of this ‘appraisal’, the opportunities for grief are enormous. Maybe it doesn’t matter, but with most people the chances of someone going home feeling cheated here is extremely high.

This is a classic example where a competent appraisal, by a qualified and independent appraiser, and backed up by credible lab grading, is WELL worth the money.
 

Bonfire

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Huge slippery slope here. Neil gave you some excellent advice. Please take the steps he outlined and don't be in a hurry. This situation has huge ramifications and deserves thorough examination. Good luck.
 

MollyMalone

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By any chance, did the executor of your grandmother's estate have the ring appraised in conjunction with the inventorying and probate --including any tax return filings (e.g., is it included on Schedule F of the federal estate tax return, IRS Form 706) -- of your grandmother's estate? (I'm assuming her estate is "wrapped up", but maybe not?)

Think you'll be happy to learn that as of today, the turn-around time at either one of the GIA labs in the US is a mere 10 days :))
http://www.gia.edu/gem-lab-return-dates
 

Gypsy

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40,198
Send the ring to Neal. Original appraisal is not worth squat.
 

diamondseeker2006

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I agree, the original appraisal is pretty worthless. If the diamond is 3 cts and E SI1, I am seeing a retail price range of $41k-53k for GIA excellent cut, and this one may be very good which would drop the price a bit. So we can make a guess that the appraisal was inflated by twice what it is worth at retail. So I really can see that $30k might be a realistic second hand sale price. It just makes me MAD when appraisers inflate prices so much! That really complicates things in situations like yours where relatives think the diamond is worth a ton more than it really is. Not to mention you would NEVER want to insure at such a grossly inflated value. Of course, who knows what the true grading will be.

Neil is wonderful for this purpose and just be sure you explain your purpose to him so that he understands that you do not want a high retail value on the stone. However, I am not sure how you are supposed to insure the diamond to send it anywhere. What is the nearest large city to where you live? Maybe we can help you find a respected independent appraiser nearby.
 

lambskin

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Bonfire|1462910093|4029889 said:
Huge slippery slope here. Neil gave you some excellent advice. Please take the steps he outlined and don't be in a hurry. This situation has huge ramifications and deserves thorough examination. Good luck.
Ditto! Family never forgives and never forgets when it comes to this...
 

MollyMalone

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memandmyarrow, may I ask if your mother's siblings are all on board with the idea of you & your fiancé being the ultimate owners of the ring -- or are they not yet aware of your interest in it becoming your engagement ring because you've been thinking you would wait to broach the topic until you had a specific selling price to put on the table?

Have no idea what family dynamics are in play or likely to surface (sibling rivalry, any other grandchildren to be considered?). But even if your aunt(s)-uncle(s) have given their blessing to the general plan, I don't think the choice of an independent, credentialed appraiser should be presented as a "unilateral" one, made by you & your fiancé or even you two & your mother (does she have custody of the ring, is it your mom who's been paying the insurance premiums on it for the past year or so?). Think you should propose nothing "more" than the choice of appraiser be a collaborative one made in consultation with -- and agreement of (or a majority of) -- all the current owners of the ring. Perhaps from a list of three?

And if this hasn't already been aired with them, please know that one or more of the owners may feel that the choice is entirely their decision to make... with you, the would-be purchaser, not having an equal, or even any, say in the decision. Not opining that such a sentiment on their part would be right or wrong, just want you to anticipate that feelings in such matters can be different than what you might expect.

FYI If an appraisal were done for estate tax-probate purposes, that should reflect, as of the date of your grandmother's death, the Fair Market Value in accordance with the IRS definition given here (appraisal report may also refer to some other, state variation if state provisions don't mirror the federal ones)
https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Frequently-Asked-Questions-on-Estate-Taxes#7
That FMV appraisal figure would also be the legatees' (your mother, her siblings) basis for the capital gain, or loss, calculation they each presumably would then report on their tax returns for the year the ring -- a capital asset under the US tax code-- is sold. So they may say they want the independent appraiser to make that same kind of FMV valuation, or first express the wish to confer with a tax professional re the appraiser's MO before the appraisal appointment is made.

Hope it all goes smoothly, with generally positive feelings all around!
 

denverappraiser

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For what it's worth, Fair Market Value (FMV) isn't exactly the right question either. That has to do with what an item would be expected to COST in the usual and customary marketplace for items of that nature. In this case a big, used, 1950s vintage engagement ring. All of the qualifiers about willing buyers, willing sellers, arms length transactions and so on apply, but what's the usual and customary marketplace where you would go to buy such a thing? That'll vary a bit depending on the details but it's likely to be a vintage jewelry store, pawn shop, consignment shop, auction house, or some other sort of secondhand jewelry dealer. Most individuals don't have access to sell in this marketplace, at least not without paying commissions. If what the family want's to know is how much they could reasonably expect to sell it for in an arms length transaction to an unrelated 3rd party, that's not the same question (unless they happen to own a jewelry store of course).

To be sure, FMV is used for federal tax purposes, like estate taxes, charitable contributions, capital gains and the like, but it's rarely used in cases like this, despite the word 'fair' in the name.
 

meandmyarrow

Rough_Rock
Joined
May 10, 2016
Messages
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Thanks for all the feedback so far. This is helpful.

My grandmother's estate was not of enough value to necessitate probate. My mom does have custody of the ring (it has been in a safe deposit box for years), and she had it appraised last year out of curiosity. She and her siblings were not thinking about selling the ring at the time (to me or third party), and she didn't know that appraisals could serve different purposes. The appraisal was done by Northeast Gemological, and the appraiser did explain that $95,000 was far more than they could hope to get if they ever sold. No one in my family thinks this ring is "worth" $95,000.

At this point, some but not all interested parties are aware of the situation. The consensus so far is that it would be nice for the ring to stay in the family and be worn, rather than remaining locked in a bank. I wanted to have a rough price range in mind before presenting the idea to everyone else (FH and I would like to be confident that this a realistic possibility).

We are in New York City. I'm sure there are some wonderful resources here, as well as some we should avoid. Can anyone recommend an appraiser that could help us? I did call GIA yesterday to discuss the process of having the diamond graded. We're still apprehensive about removing the diamond from the setting, but this may very well be our next step. MollyMalone, I like your idea about making the choice of appraiser a collaborative effort. My mom and I are both in NY, but the rest of the family is scattered across the country. I doubt we'll be shipping the ring, so all NY recommendations are welcome. Thanks, everyone.

denverappraiser—to your last point, is this something an appraiser can help us determine if all of the diamond specs are known?
 

denverappraiser

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meandmyarrow|1462976956|4030217 said:
denverappraiser—to your last point, is this something an appraiser can help us determine if all of the diamond specs are known?
Yes. And quite possibly even they guy at Northeast can do it. They're a capable firm. It's a matter of making sure to ask the right question. As mentioned above, $95k seems high even for retail replacement but, at best, it's the correct question to the wrong question. You may want to have the appraiser pull it and send it in by the way. It's not that it's difficult to do, and normally it's not very expensive, but it's definitely a job you want to have a pro involved. A note, by the way: Resetting costs more than removing, especially if it's going to need any sort of prong work. If you're planning on mounting it in something else it doesn't much matter but if it's going back into the same ring, and especially if you aren't going to end up the buyer, you might want to consider who will be responsible for the charges.
 

MollyMalone

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I'm in NYC & am very happy to recommend David Wolf/Just Appraisers; the office is right by Rockefeller Center @ 49th and 5th, so 2 blocks from GIA. I bet he would be willing to pull the center stone and walk it to the GIA lab (and I certainly would trust him to do so).
https://justappraisers.com/about-us/#david
https://justappraisers.com
http://www.yelp.com/biz/just-appraisers-new-york

My father, a trusts and estates lawyer whose firm is in the Midwest, first retained Mr. Wolf in conjunction on behalf of an estate years ago & I personally have used him as well. And because you are in NYC, it would be very easy for you, whoever else is interested, to sit with him -- which would be a wonderful experience; he's very nice, very informative; it's like having a personalized diamond "tutorial" :))

P.S. I wasn't intending to suggest in my previous post that an IRS Fair Market Value appraisal is what you should be asking for (my professional niche is criminal law); rather, just wanted to alert you to the possibility that -- if such an appraisal had been done a year or so ago -- that same kind of FMV appraisal could be what your mother-her siblings might think, at least initially, should be done again.
But now we know that wasn't done, so they are unlikely to have that expectation.
 

MollyMalone

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Another possibility, on Long Island: Deborah Villepigue in Manhasset.
http://thejewelryappraiser.com
http://www.yelp.com/biz/the-jewelry-appraiser-manhasset-3

I have no first-hand (or even second-hand) knowledge about her, but like Neil Beaty (denverappraiser), she holds the AGS title of Independent Certified Gemologist Appraiser, an excellent, and rare, credential:
https://www.americangemsociety.org/independentcertified
Here's her professional profile from her web site:
http://thejewelryappraiser.com/professional-profile/
 

Kimmy

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You've received some great advice here. I'm under the impression that you want to wear this ring as it is and that your intention is not just to value the stone. You mention that you find the antique setting beautiful and that it holds sentimental value. If this is the case, then I would be sure to clearly communicate this with your appraiser. Since this ring is not for sale and is a family heirloom my priority would be on preserving the integrity of the ring. I would not do anything that could possibly damage the original ring without permission from all owners.
 

Laila619

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If you can't or don't want to dismantle the ring, you won't be able to ever know the true worth of the ring, and it's just going to be an estimate that may or may not be accurate. I mean, you could say $30,000 and it could be way off. No way to know without a GIA report unfortunately. Are you sure you want this family ring? Would you rather shop for your own diamond and setting, or do you have your heart set on Grandma's ring?
 

LLJsmom

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You're dealing with family and a potentially significant purchase. For all parties involved, get a GIA cert on it so all parties are fully informed by a disinterested and respected third party. I want to keep things clean and neat and no fuel for finger pointing in the future on an item that could have so much meaning for you and your fiancé. The time, effort and relative minor cost is worth it.
 

Mayk

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I have nothing to offer. Just keep coming back in hopes you will post a picture. :wavey:
 

meandmyarrow

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It’s been a while, but I wanted to share an update. We took the ring to David Wolf for a pre-appraisal and then walked the diamond right to GIA. The report is now ready, and the appraisal is scheduled for next week. The most interesting part so far is that the first appraiser got the weight wrong—it’s actually 2.85 ct!

Laila619, no, I’m not set on anything. I’m a sentimental person, and that’s the main reason I’m considering this ring. I do have a good idea of what I want if I go another direction. I’d need some guidance, and I’ll likely start another thread for that :)

In the meantime, here’s a picture of my grandma’s. Opinions welcome!

img_3871.jpg
 

VRBeauty

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meandmyarrow|1465593042|4042782 said:
In the meantime, here’s a picture of my grandma’s. Opinions welcome!

img_3871.jpg
:love: :cheeky: ! ! !
 

LLJsmom

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It is lovely and looks great on you! What are the GIA specs?
 

msop04

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VERY nice!! I'm interested to see what the specs are! :love:
 

msop04

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...and I *puffy heart* LOVE the tab prongs!! I'm doing 6 petite tabs on my reset -- LOVE!!!!!! :love: :love: :love: :love: :love: :love:
 

lovedogs

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Wow, I LOVE this ring :love: :love: . I've been following this thread out of interest, but had nothing helpful to contribute. Now I can comment that I can definitely see why you'd want someone to wear this beauty--it's gorgeous and classic! And I hope this ends up working out for you and your family such that you can wear it and enjoy it for another lifetime! I am also very sentimental and LOVE antique pieces because I like to imagine the "lives" they've lead and everything they've seen. haha strange I know, but that's what I think when I imagine this ring. :wavey:
 

Snowdrop13

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Gorgeous diamond and such a classic setting! Please let us know the GIA deets, it looks very, very white I must say!
 
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