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Should I replace the original HRD cert?

Discussion in 'RockyTalky' started by wawag, Jun 30, 2014.

  1. wawag
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    by wawag » Jun 30, 2014
    *NOTE: I'M A COMPLETE DIAMOND NOVICE/KNOW NOTHING** I'm thinking of upgrading my round diamond solitaire engagement ring and have a question about the original diamond certificate that I received when the diamond was purchased in 1997. The date on the HRD cert is 10/10/96. The HRD cert doesn't look very detailed (compared to what I see on line these days with new stones) which I fear will hinder my efforts in trying to sell my diamond privately or trade it in. Should I seek a better certificate? I have a few appraisals that have been done over the years (for insurance purposes). The most recent appraisal was done by EGL, Inc. The appraised value of the ring (14 kt yellow and white gold Tiffany style mounting, 1.05 ct H vs1 - finish grade/proportions - very good) is $13,150. I'm trying to determine what the diamond is worth or what I can expect to sell it for (a fair price). I'm confused as to how to determine what my diamond is worth given the limited amount of info on the HRD certificate. Any advice would be helpful. Thanks!
     
    


    


  2. denverappraiser
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    by denverappraiser » Jun 30, 2014
    Unfortunately, insurance replacement appraisals aren’t very useful in evaluating resale values. Realized prices range from about half down to 10% or less.

    The other question is a bit harder. Assuming you’re in the US, you’ll find resistance to the HRD paperwork. That said, it may or may not benefit you to get it graded somewhere else, presumably GIA. The issue is twofold. First, what are your marketing plans? If you’re going to sell to a dealer, you probably won’t get enough extra for it to justify the expense, time and grief to get GIA, and any other brand is going to get the same sort of resistance. The other issue has to do with the cut grade GIA introduced in 2006. A grade of ‘good’ or below is a serious commercial problem. You’ll end up selling using the original papers anyway.

    Personally, I think it’s worth your trouble to talk to an appraiser who is prepared to answer the questions you actually have without trying to translate from some other sort of service (like an EGLUSA ‘insurance’ evaluation.). I would ask specifically if they’re prepared to do a cut evaluation using the GIA grading scale.
     
  3. wawag
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    by wawag » Jun 30, 2014
    Thank you for the advice. I do live in the US which is why I'm concerned about the HRD cert. I do realize that the appraisal I have is for insurance purposes only and won't be helpful in determining what I could expect to get for the diamond if I sell it privately or decide to trade it in.
     
  4. GeorgeStevens
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    by GeorgeStevens » Jun 30, 2014
    It must be great to be a jewelery insurer. Phony appraisers issue papers saying a diamond is worth $13,000 when you can buy the same thing off any website for $5000, which means it has a wholesale cost of $4000 or less. So people end up paying triple the premium they should. If only Geico could figure out how to get people to pay to insure their Honda Civics for $60K... and when they total the car, Geico buys them a new one for $10K.

    DenverAppraiser is right, but I'd add that it's now easy to see what a diamond is theoretically selling for, assuming the paperwork is accurate, simply by going online and trying to buy what you already have. Add a small amount for the setting (melt value of 18K gold is $30 a gram, typical ring is a couple of grams).

    I am not a fan of trading in or selling diamonds unless you're desperate. You lose a tremendous amount of value, especially if you're not savvy. Mrs. Stevens has the same diamond from when I proposed, and she now has diamonds in necklaces etc. that are worth several times the e-ring. I'd rather take the money that I'd lose trading-in her stone and use it to buy something new.

    Also you really want to avoid the hassle of sending it to GIA. Unless you live in NYC or LA, you have to remove it from the setting, mail it in along with $100, wait about 7 weeks (current timing), and hope it comes back. That's only worth it if you decide to go the private sale route.
     
    


    


  5. wawag
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    by wawag » Jul 1, 2014
    Thanks George. The idea of having the stone made into a pendant is one I hadn't thought of. I never assumed that the appraised amount for my ring would equate to the diamond's actual value. You are correct that it all seems like such a scam! I'm guessing that my diamond (based on comparing it to other stones of similar quality on-line) is probably worth between $4800 - $6800 but it's hard to know for sure since I'm not an expert on these things. Being able to determine a more specific dollar amount could be helpful in deciding what I may be able to afford with my upgrade. I'll keep doing my homework but based on what I've learned here, I will NOT consider getting my stone re-certified. It wouldn't be worth the hassle and I'd be better off just holding on to it if I can't sell it for a fair price.
     
  6. denverappraiser
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    by denverappraiser » Jul 1, 2014
    George.

    There are a couple tricky points that come into play with this methodology.

    1) The prices you see advertised online, for example in the database here, are aggressive discount retail prices. They’re offers for sale by dealers, not transaction prices, which is to say they may or may not actually get their price. Assuming that you aren’t a jeweler, you aren’t going to be able to sell for those prices. How close you can come varies with what you have. Some things are a lot easier to sell than others. Some people are a lot better at selling things than others. Sales is a skill just like anything else. If you don’t know if you’re good at it or not, you’re not. Yes, it matters.

    2) There’s a feeling with diamonds that it’s a relatively level playing field and that all 1.00/F/SI1 rounds should cost about the same, at least in the narrow specialty market we’re talking about. This is simply not the case. Prices range by nearly a good 50% even before we get into grading lab topics. It has to do with the off-report things like cutting details, eye-visibility of inclusions, branding, location and so on. Some are gemological properties and some aren't but they have a considerable affect on the marketplace.

    3) Grading differences matter. That’s why sensible BUYERS want credible labs. I don’t have much of a problem with HRD as a lab but I wouldn’t recommend a consumer touch it. Why? Because the difference between an H/VS1 and an I/VS2 is huge. Thousands of dollars. If you include the possibility of J or SI1 and it's thousands more. With GIA grading, people are willing to stipulate that the grade is what it is but with any other lab they’re not. Maybe it’s an H, maybe not. With GIA, the clarity and color questions have been answered (unless there’s a condition issue) but with other labs they haven’t. This means that they're still part of the negotiation. Whether this is good or bad goes back to #1 above. Some people are a lot better at this game than others.

    4) It actually IS a moving fashion target, despite the whole ‘diamonds are forever’ thing. Since 1996, the rules have change dramatically. The biggest change is the GIA cut grade but there have been some subtle things as well. Country of origin topics have come and gone. The perception of fluorescence has change dramatically. ‘Hearts and arrows’ came in and has largely moved on. High clarity combinations like G/VVS used to be very popular, commanded a premium, and were hard to find. Not so much now. Now the proverbial sweet spot is H/SI1 or even 'eye clean' SI2.
     
  7. Rockdiamond
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    by Rockdiamond » Jul 1, 2014
    Great question wawag
    Here's my take:
    First off, do a bit of shopping, and see if you can find a seller that has what you want, and if so, will they be willing to accept a trade. This may be your best shot at getting max value for your stone.
    I agree that an appraiser might be able to provide some useful info here- but if you pick a seller you are comfortable with, you may be able to skip that step.
    In general, my policy is to generally advise consumers with a 1ct ( or larger) stone to submit to GIA before selling- even if they are selling to us.
    As a buyer, I'm going to have to assume the very worst without the GIA. For example, if I see the stone as possible G-H color, I'll have to figure prices at I-J color levels if I'm buying without a GIA report.
    It was mentioned that the report takes a few months, and if we ( or any wholesale account) submit, that's true.
    BUT when consumers submit a single stone, they get faster service. I would not have any concern whatsoever about getting the stone back....

    Having the GIA report will only put you in a more informed position- even if you're selling to a dealer IMO

    I do agree with George's point about jewelry insurance.
    Many buyers use heavily inflated values issued by EGL- or worse yet, by the seller themselves. In my experience the insurance companies are glad to take premiums based on inflated appraisals- and very few policies offer cash replacement. So they are happy to insure a J/I1 1.00ct stone which can be purchased for $2500 for a $15,000 replacement value premium
     
  8. Gypsy
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    by Gypsy » Jul 1, 2014
    As someone who regularly buys pre-owned jewelry. I agree with this (and RD's whole post is sensible, frankly) I do assume the worst without an AGS or GIA lab report, with few exceptions.

    If you are looking to sell it soon, it's a smart investment.

    GREAT post, very informative.
     
  9. denverappraiser
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    by denverappraiser » Jul 1, 2014
    Gypsy,

    Just a question as a buyer. If a GIA report says something that you count as a negative, say a 'fair' cut grade, is that worse or better than an old HRD report that says nothing at all about cutting? You're not a likely buyer either way, right? So who IS the buyer? The people who aren't going to count that as a problem are either going to be either unsophisticated consumers, who probably would be fine with the HRD in the first place, sophisticated dealers who are going to recut it in order to fix the problem and make a new stone, or a scummy dealer who are going to rebrand it in a way that obscures it and sell it to an unknowing buyer. In all 3 cases, it hasn't improved in either saleability or price by adding the GIA brand.

    Note to Wawag. I have no reason at all to expect that YOUR stone has problems. This is a theoretical question because we really don't know much of anything at all. The assumption and the original question is if GIA branding would help sell your stone. I agree, it might, but it might not.
     
  10. Gypsy
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    by Gypsy » Jul 1, 2014
    Yes. I am not likely to buy either way.

    But it depends on what I want the diamond for and how much I'm paying for it. If it's something I'm getting a recut on... and it's priced well, I would like to have the GIA still. But if it's just at a carat, it's not likely I'll want a recut unless the color and clarity are high enough that it would make it worth it to me to have a GIA Ex 90 pointer over a GIA "Fair" 1.0 carat. But in some cases, that might be worthwhile, depending the spread loss AND on the resulting cut grade of the diamond. "Fair" or "Poor" diamonds are discounted enough that a recut might be worthwhile IF the color and clarity are high enough, even if the recut results in a final weight under a carat and improves the diamond enough the the cut increase compensates for the stone being under a carat.

    But if it was just for wearing, I'm not your average buyer so yes, I would want a GIA EX or at least a VG (that's priced accordingly) with a complimentary angles. So I wouldn't buy it in any case.

    BUT if I can rely on the clarity and color grade, even if it is a "fair" cut then that's something. And if he's selling to dealer that is okay with selling "fair" or "good" cuts, I would assume it would be a bonus, no?

    I do see your point about the cut grade. Yes, it would be MUCH better if he knew that the proportions are going to net a VG or EX from the start. And he really just needs a SARIN for that of the stone, and to post it here. And the hardest part of that is finding someone with a SARIN.

    So, maybe get a SARIN first. Then decide what to do? If the Sarin shows something not favorable cut wise, then a recut evaluation might be worthwhile to see what improvements could be done to the cut, with minimal spread loss to increase value.
     
    


    


  11. Rockdiamond
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    by Rockdiamond » Jul 1, 2014
    Hi Neil,
    I'm not Gypsy, but I'd like to add my thoughts- you bring up a very good point.
    What if the GIA report indicates problems in cut- or other detrimental values?
    A consumer is still in a better position knowing that if they want to sell to either a dealer or another consumer.
    If someone is reading this forum, it's likely they're interested in knowing what they have to make a fair assessment as a seller.
    If a commercial jewelry buyer is going to try and offer a low price, I agree, a GIA report with a negative comment won't help.
    There's so many guys on 47th Street hawking- and I'm not talking about the ones there to get people to buy- rather the hawkers trying to find the poor souls trying to sell a diamond on 47th street.
    Clearly they're putting so much effort in for only one reason- buy low. WAY low.
    They probably use many techniques to attempt to intimidate sellers. It's true, a GIA Report likely won't help there.
    But I think the key consideration for the consumer trying to sell is similar to one for people buying- they need to find someone they trust.
    Personally I feel like consumers have a better footing for an honest transaction if they know what they have.


    Thank you Gypsy- I'm sure you'd make a very savvy commercial jewelry buyer :naughty:
     
  12. GeorgeStevens
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    by GeorgeStevens » Jul 1, 2014
    I don't mean in my post to denigrate or devalue the work of a qualified appraiser. Yes, there are many off-cert factors and fashions etc. that affect values. For something like a divorce settlement, estate valuation, gift tax return, or insurance, having a very accurate appraisal is quite important. While finding the price of a diamond isn't as easy as looking up a stock price, I do think one can get a ballpark price by checking an online vendor. As you point out, these are asking prices of a retailer with at least some degree of overhead, branding, etc. to support. So the price a consumer sells for will be lower.

    My instinct is either to repurpose the diamond, barter it, or try for a trade-in. Knowing the price that the stone would sell for at retail will help you understand how much margin you're giving the dealer if you barter or sell.

    One other idea may be to donate the object. If you're a US taxpayer paying at a marginal 50% federal state & city marginal tax rate, a donation of a $5000 stone will net you a $2500 tax break and $5000 of goodwill with your favourite charity. The IRS will require an appraisal for this, per publication 561. If you sold the stone for, say, $3000, you're really only "gained" $500 vs. the tax-adjusted value of the donation to you ($2500 deduction). A sophisticated charity will have experts who can get the best price for the stone once you donate it.
     
  13. Rockdiamond
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    by Rockdiamond » Jul 1, 2014
    Really good point about appraisers George.

    For anyone NOT reading this forum:
    You know nothing about diamonds and had better find a qualified appraiser. :naughty:

    Seriously- I agree too that if a consumer really has doubts about what people trying to buy the diamond are telling them, finding a qualified appraiser is a very good idea.
     
  14. denverappraiser
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    by denverappraiser » Jul 2, 2014
    I talk to private sellers often. Nearly every day. The goals are almost always the same. They want to maximize money for what they have. They would like it as quickly as possible, with a minimum of risk, expense and effort. That’s where things start to diverge. As a rule, you can’t get all of these things together. You have to rank them. Speed usually reduces money. Effort usually increases it. Expense sometimes help and sometimes doesn’t. The balance isn’t the same for everyone and nearly everyone is working on incomplete and/or seriously flawed information. What information? They don’t know what they have (they usually think they do). They don’t understand the markets. They don’t know where or how to invest effort or money to improve things even if they want to. They don’t understand the risks. At least HALF of the time spent in my typical resale appraisal session is on these sorts of topics.

    The point of hiring an appraisal is to gain useful and accurate information. It turns out there can be a tricky issues on both points, but with resale clients the problem is often in the useful part. They want to believe their stuff is worth a lot. They want to believe that sales skill doesn’t matter and that prices realized are strictly a matter of what they have. They want to believe that the grading is what the seller or some appraiser told them, and they want to believe that their buyer is going to be shopping the same way they did, or at least the way they would now. Part of appraising of this type is to provide the clients a reality check. They may not want to hear it, but what they NEED to know is the truth, the whole truth, and nothing but the truth. They then can use that to make a rational and informed decision. Anything less is a disservice. Clients routinely start with preconceived notions that are both inaccurate and self-destructive to their sale.

    One minor additional point. An appraisal is the act collecting, analyzing and communicating information. It’s a process. An appraisal REPORT is the document generated at the end. If you weren’t the client then you didn’t get an appraisal. What you got is a report. No, they are not the same thing.
     
  15. Gypsy
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    by Gypsy » Jul 2, 2014
    Great point about intimidation RD. Without the GIA you will get people saying to you "Oh that's not a G. It'a J at best, and it's a terrible cut" just to intimidate, cause doubt, and make you come doubt. GIA gives you the seller assurance and let's you find comps online. So that you KNOW what the value of your diamond is. EVEN IF it says "fair" or "good" cut.

    I too feel a honest transaction with a good buyer is best. But there are a lot of jerks and liars out there. GIA at least helps you stick to your guys about some of the doubt that can creep in when negotiating with a buyer.

    I think appraisals are GREAT incidentally. And I agree with the reality check. The problem with appraisals is that everything depends on the appraiser. And good appraisers are hard to find. Neil you are a great appraiser one of the very best. The large majority aren't as good as you are. Or as ethical. Or as competent.
     
    


    


  16. wawag
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    by wawag » Jul 2, 2014
    I'm going to go visit a diamond buyer today IN PERSON and also go visit a jeweler that I did business with years ago. It'll be interesting to see what they both have to say. I've spoken to a couple diamond buyers over the phone and they have given me ball park ranges for what I could expect to fetch for my ring. It'll be interesting to see what my jeweler can do from a trade in point of view. The advice and info I've gathered from this site has been tremendously helpful! Thank you all!! =)
     
  17. Rockdiamond
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    by Rockdiamond » Jul 2, 2014
    I also speak to many people trying to sell their diamonds - practically on a daily basis lately.
    Neil and I have different perspectives in some senses due to the different functions we perform.
    But when someone does have a diamond to sell, I put on my appraiser hat and give the person context about the market they are selling into.
    For example, it's basic common sense, but bears repeating- a seller is going to realize a much higher price of they can find a private buyer, as opposed to selling to a dealer.
    Neil touched on this.
    Another consideration that does come up frequently is the confusion about paperwork that people have regarding their diamond.
    I wholeheartedly agree with Gypsy's assessment of you Neil- unfortunately, not may people walking into an "appraiser" find someone like you.
    The result is that many people that call us to sell their diamond have appraisal reports which were given to them without context. This gives them a sense of false confidence.
    Person trying to sell their diamond: "My diamond was appraised for $12,000,000,000"
    Me: "Is there a GIA report?"
    Them: "Yes, I have an appraisal by a GIA certified gemologist, isn't that the same thing?"
    Of course!
    (and if pigs had wings they could fly too.)

    wawag- I'd love to hear what happens in your specific case.
     
  18. heididdl
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    by heididdl » Jul 2, 2014
    As a "gold buyer" I would offer $1500-2000 without papers (or 20% of the appraised value)...sorry
     
  19. heididdl
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    by heididdl » Jul 2, 2014

    They will offer more if you are buyimg from them as incentive. I would guess they wiill offer you $2600. I am so curious so plz post
     
  20. denverappraiser
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    by denverappraiser » Jul 2, 2014
    I appreciate all of the kind words and I do try to maintain my practice at the top of the field but it’s not correct that I’m the only one out there that does it ‘right’. I know dozens. Allow me to recommend the folks from the American Society of appraisers (www.appraisers.org) and the Independent Certified Gemologist Appraisers from the American Gem Society (www.ags.org) as well as the members of the Independent Association of Jewelry Valuers (http://www.independent-jewellery-valuers.org)

    Another great resource is the National Association of Jewelry Appraisers (www.najaappraisers.com)

    Look for people who at least claim to be compliant with the Uniform Standards of Professional Appraisal Practice (www.USPAP.org). Compliance is voluntary, it's not particularly easy to do, and there are some rules that are a bit arcane, but appraisers who have studied and understand the rules tend to be the ones to take their job seriously.

    40 years ago, appraising was a sideline job for jewelry salespeople to do in their spare time and that's why the reputation is for so many charlatans. That's changed, and it continues to change. As a client, you no more want this service than you want dental work done by your barber but I bristle at the idea that this means appraisers are useless. THOSE appraisers are useless.

    Strategies I specifically DON’T recommend is just looking up the closest jewelry store and, even worse, calling around and finding who does the cheapest work in your area. SOME jewelers are pretty good, but a lot aren’t, and the cheapest are very rarely the best.

    Always with appraisers, make sure they understand what you are asking and that you understand what they’ve answered. That’s why I mentioned the difference between an appraisal and an appraisal report. This is especially true if what you're looking for is different from the standard pre-loss insurance documentation sort of work.

    Professional advice from a buyer, or even from an otherwise perfectly good appraiser working for a buyer on your deal, is like getting legal advice from opposing council. It’s not necessarily wrong, but it’s good to be aware. Their interests are NOT aligned with yours.
     
  21. wawag
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    by wawag » Jul 3, 2014
    The results of my trip to the diamond buyer and jewelers was educating and pretty much confirmed what I've been reading here on this forum. The diamond buyer said he would give me $2500 for my stone. The jeweler said he would give me $5500 as a trade in towards an upgrade. I looked up a diamond on BN with very similar characteristics as my diamond and it was priced a little over $7000. I'm leaning towards holding on to my stone and upgrading without the trade in. We'll see....
     
  22. Gypsy
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    by Gypsy » Jul 3, 2014
    Neil, you need to make that a Sticky or something. I'll put it up in Helpful Threads, but.... I would LOVE a standalone thread or post or page that has this information in it.

    :wavey:
     
  23. GeorgeStevens
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    by GeorgeStevens » Jul 5, 2014
    OP: Interesting how close speculation was to to reality of what you were quoted. Thx for the followup. I assume these were first quotes, i.e. you didn't haggle the lowball initial offer, and you weren't on 47th St where the market is a bit more competitive than elsewhere.

    I might make a thread about donating diamonds if there's not one in the archive, as the tax deduction would be worth as much to many people as they'd get from selling the diamond.
     

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