Purchase Price vs. Appraisal Price

[Mattcv]

I just received my ring back from Tacori (post pics soon). It looks great and I am really happy with the JA truehearts diamond that I set into it. I am troubled about 1 thing, my appraisal price is less than my purchase price. This concerns me because the jewelry store that I went to tried to match my diamonds price and they were off by >$3000 so if the appraisal is based on replacement cost how could they not be at least equal?

Is this something I should be worried about?

 

[denverappraiser]

Who appraised it? Read through the appraisal report and make sure the raw data like the weight, clarity and color are correct. Then call up the appraiser and ask ‘em about it. It may be as simple as a typo.

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

 

[Mattcv]

A B&M jeweler that reps Tacori. All of the data matches the AGS cert. I''m not sure it really matters but it seemed really strange to me since most times I hear about a significant over estimation placed on the rings value.

Purchase Price: $4,000 Tacori Setting $12,000 Diamond (LINK) = $16,000
Appraised Value: $15,200

 

[denverappraiser]

It sounds like a problem with the appraisal. I’m going to assume that the appraisal is estimating the replacement cost for purposes of insurance. The usual way to estimate replacement cost on a current production designer piece like Tacori is based on the manufacturer’s suggested retail price and through an authorized dealer. Presumably a Tacori rep would have that down so the issue is valuing the center diamond. In most cases, that has to do with what the appraiser expects it to cost in the ‘usual and customary’ market and, in most cases, that means at a local B&M store, quite possibly the same store that’s selling the mounting. This should be spelled out in the fine print of the appraisal report. It seems unlikely that that stone could be replaced for $11,200 but that’s the question to be asking since that’s what you’re thinking is being answered in the appraisal. Maybe they''re saying something else entirely. Ask. Does it matter? Probably not but it depends on what you are doing with the appraisal. If you bind an insurance policy with it, I think it’s likely you will find yourself underinsured in the event of a loss. If it’s just for your own information or to provide extra paper to line the bird cage than no, it doesn’t make much difference either way.

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

 

[Mattcv]

Thanks for the quick feedback that makes me feel much better. I am going to provide the extra information the JA provided me (hearts and IS) in the insurance file so I have everything accounted for.

 

[diamondseeker2006]

I think you should be worried that the jeweler you used is not very ethical since they really lied to try to keep you from buying that diamond.

 

[bgray]

Date: 9/18/2009 8:51:26 PM
Author: diamondseeker2006
I think you should be worried that the jeweler you used is not very ethical since they really lied to try to keep you from buying that diamond.

i agree............and perhaps the appraisal is a way to teach you a lesson?

 

[Mattcv]

Do you think I should take it to an independent appraiser?

 

[diamondseeker2006]

Date: 9/19/2009 1:13:05 PM
Author: Mattcv
Do you think I should take it to an independent appraiser?

I pesonally see no reason to take an AGS certified diamond to an appraiser unless it costs $50,000 or something! It has already been graded by an independent source. The issue is insurance, and I prefer to insure for the amount we paid as opposed to some inflated price. That just makes the ins. company richer! I have always been able to insure with my sales receipt and a copy of the diamond cert. However, I think I''d tell that jeweler you need your "appraisal" to match the price you paid for both the stone and the setting, or you will be taking your business elsewhere in the future (which I think is a very good idea, period!). I doubt he could match the price you got for your AGS0 stone!!!!

 

[Mattcv]

Turns out they made a mistake on my appraisal. The jeweler called me back and let me know that it should have been $21,300 not $15,200.

 

[diamondseeker2006]

Date: 9/21/2009 3:52:56 PM
Author: Mattcv
Turns out they made a mistake on my appraisal. The jeweler called me back and let me know that it should have been $21,300 not $15,200.

That is much better! Glad they decided it was a mistake! However, you still have the issue of whether you want to pay a premium for an inflated value or the sales price.

 

[Mattcv]

I decided to pay my purchase price. It seemed better than paying for the inflated value.

 

[diamondseeker2006]

Date: 9/21/2009 9:16:25 PM
Author: Mattcv
I decided to pay my purchase price. It seemed better than paying for the inflated value.

Good decision. In few years, you can always have another appraisal and increase the value if you see diamond prices rising. But there''s never really any point in insuring for more than the items actually cost at the time.