So I need to sell a 7 carat diamond

[denverappraiser]

Don't get ahead of yourself. There are more variables than you know, but a few of them are easy to get past. Start with GIA. That's not the end, but it's the beginning of every path.

I'm not all that big on auction houses for this sort of thing because the commissions are so high but they do have the advantage of a firm sale date. That will depend on your MIL. If it takes a year to sell it, will she be OK? Will she be ok if there are costs in the interim?

 

[AllThingsSparkling]

I wanna smell it!

I promise we will all see, smell, and taste it before I part ways with it! Lol. My MIL is away for July, I will have it in a few weeks and start this process. Probably jumped the gun on this thread but how could PS not be my very first stop!

 

[AllThingsSparkling]

Don't get ahead of yourself. There are more variables than you know, but a few of them are easy to get past. Start with GIA. That's not the end, but it's the beginning of every path.

I'm not all that big on auction houses for this sort of thing because the commissions are so high but they do have the advantage of a firm sale date. That will depend on your MIL. If it takes a year to sell it, will she be OK? Will she be ok if there are costs in the interim?

Absolutely GIA. There is no time crunch to sell it, the priority is a safe, fair deal. Definitely okay and expected to incur some costs. Im just going to keep researching and reading all I can in the meantime to determine what avenue to take.
@denverappraiser what is a typical auction commission for this sort of sale? Just curious.

 

[denverappraiser]

15% from the seller and 25% from the buyer is pretty typical.... 40% of the total. There's a return fee if it doesn't make your reserve and there are often cataloging, insurance, photography, shipping and other fees that can be in the thousands. It varies between the auction houses. They all have a terms and conditions page on their website. Obviously, it's worthwhile to read this before you proceed.

Don't be fooled by the split between seller commission and buyer premium. Any buyer with sense, and that includes anyone in the price points you're talking about, can and will do the math.

 

[denverappraiser]

Not to sound self-serving, but expert advice is very helpful here. There are quite a few variables and that will change the market selection and marketing approach.


Cutting was brought up above for example. Even if you don’t want to cut it (which you probably don’t by the way), it’s important to know if the ‘highest and best use’ is to sell it to someone else who will. That'll lead to a different marketing plan. You would be wise to involve someone who understands this topic and who is NOT trying to buy it from you.


Choosing a consignment jeweler is not really as simple as choosing the one with the lowest fees and, again, expert assistance may be helpful here.


As mentioned above, I would start at GIA although I didn’t see your answer to whether or not it’s currently mounted. GIA will only work on unmounted stones and you don’t want to be doing this yourself. They won't unmount it. That makes a slightly different strategy. Start with an appraisal. Appraise it mounted and bind an insurance policy. Then have it removed and take/send it to GIA. Then talk to a pro (possibly the original appraiser, possibly not) about the issues. Recut? Reset? Set in something else entirely? How to sell? Then you are at another decision point. Do you take their advice, talk to others and use some sort of statistical merging, listen to some sales pitches for the various services, or something else entirely.


Note: I recommend you be insistent on approximately the above. If you pull it out, or it’s already loose, you are uninsurable until it’s set. This means you have a PERSONAL exposure to MIL for troubles, and that can lead to way worse than the financial risks (which are considerable, obviously).


You’ll notice that this is a bit different from most of the advice you’ve received above. That’s because a lot of the ‘appraisers’ out there are charlatans and give bad or conflicted advice. Other than meeting a requirement for insurance, what you’re seeking is outside the box for most. An insurance appraisal is a necessary part of the process but it’s NOT the answer to your questions. Choose your advisor carefully, just as you should choose your selling agent carefully.

 

[Rockdiamond]

I'm very interested to see what happens here. The idea of a "fair deal" is an important point.
Even as a dealer, if I need to sell a diamond to another dealer I would have to lose a nice chuck of my investment- even if I got a great deal from a cutter on the stone.
The issue is the business model. If a dealer has a couple hundred grand "lying around" to buy diamonds from consumers or dealers in need of immediate sale the only way they will part with any of it is if they can buy dollar bills for .50cents. Or less.
This is one of my least favorite parts of being in this business. Many times consumers are under the impression they can get somewhere near a retail price when they sell back to the trade.
As Neil is pointing out- if the sellers really needs the money now, auction houses are no help.
The scavengers with the money to buy are well aware of this.

 

[Rockdiamond]

Neil- the stone is in a solitaire.
This might also sound self serving but I think that if the op finds a jeweler they trust, removing the diamond will be simple, and can be done in front of the op.
Good point about insurance. I'll take your word- but also suggest calling JM to see if it's insurable loose.
If the stone is removed right on 47th st it could be taken immediately to GIA with little risk.
There's always the issue of self serving advice given by either an appraiser ( not you!!) or a seller.
The op is likely sensitive to this and has the tools to choose someone trustworthy.
The advantage to involving a seller is that they likely won't charge to remove the stone and to advise. For an appraiser- especially an independent appraiser who does not sell jewelry, they would have to charge for the service. And likely a lot on a 7ct

 

[denverappraiser]

For example: Here's a 7.21 that sold at Christies in April for $45,000, including the buyers premium. Net to the seller was probably about $30,000. Was that the best they could do? It's hard to tell, of course, that's part of the way auctions work, but I wouldn't be surprised if this story started with an 'appraisal' and a customer expectation well upwards of $100,000 (depending on how the appraiser saw that color and the cutting).

http://www.christies.com/lotfinder/...1766&sid=a3d8f059-1765-4961-9aca-a7ce09078a9b

 

[denverappraiser]

'Free' service and advice is often worth less than it costs.

You're darned right I charge.

 

[Karl_K]

Neil,
If there an insurance company that would actually cover it once the stone is removed from the setting in this situation?
I thought of that but I didn't think an insurance company would cover it.
If not than an appraisal is a bit redundant if the OP can deliver it directly to GIA.
If it was being shipped anywhere then an appraisal and insurance would be mandatory in my opinion.
A good independent appraiser could be a good source for council but everything depends on the GIA report.

 

[denverappraiser]

Insurance policies vary quite a bit and I’m no agent. It’s a highly regulated industry and what I say means exactly bupkis. Read the policy and talk to the company for details. In general, it is within the coverage limits for an insured consumer to hire a jeweler to take a diamond out of his/her ring, send it to GIA for grading, and reset it. Damage/loss during the process would be covered although they may opt to subrogate against the jeweler. Jewelers block policies, which is what jewelers buy to cover their customer's property work a little differently. I know of no insurers who will expressly bind a policy on a loose stone but, again, this varies wildly with the details of the company, the state, and the policy offered.

 

[Rockdiamond]

'Free' service and advice is often worth less than it costs.

I could not agree more my friend. When someone offers a service with no possible renumeration it raises all sorts of questions.
But if a jeweler did it without upfront costs they still might have profit down the line for the jeweler to broker such a deal.
If all is discussed up front in terms of what the jeweler might earn for assisting, its not really "free". More like an investment that might pay off in the future.

 

[AllThingsSparkling]

@denverappraiser @Karl_K @Rockdiamond Thank you for your thoughts I really appreciate it. Auction house is definitely out in my mind I think... too many unknowns and since time is not an issue why risk such fees. I want to be closer to 10% than 40% !!

I think I will let it hang out with a trusted vendor on consignment for up to a year really before pursuing a "wholesale" type deal. I need to read the contract terms closely of course... what happens if it gets "lost" or damaged while in the sellers hands? If the answer is youre just SOL without a lawsuit, then I might pursue insurance (I cannot believe it wasnt insured all these years!! ) I could just have it popped back into the solitaire if need be to insure. Ayayayy so complicated! I just want to really be patient and thorough and work with absolutely trusted people, not a guy with a sign on 47th haha.

So far Im still thinking... step 1) have trusted 47th st jeweler unmount and immediately take to GIA (along with saucer-sized sapphire halo ring) for reports. Step 2) explore consignment. Will definitely go talk to @Rhino . It makes sense to me to get advice from someone who isnt trying to buy it outright. The best (realistic) pricepoint would be in both our best interests. I could also at this point send the report to establishments that buy diamonds just to see what the quotes are, find comps etc.

I do know that I will get nowhere near retail of course, part of "fair deal" means its fair to the vendor and buyer too. Really all I can hope for is a stellar GIA report at this point! Even if it comes out closer to booger than Gioconda... this thread might be a let down but my mission remains the same!

 

[Rockdiamond]

I'm also quite interested in what sort of consignment deal you can find. It seems to me that someone who has a very good shot at selling it will take large commission. There's also the potential of a seller overstating the likely sale price. There's no downside for the seller. They get to put a honker in the window( or on their web page) with no investment - and the price is practically irrelevant. If a serous buyer wants it they can simply call the owner with a lower offer.
Again, the scavengers are well aware of this.

 

[AllThingsSparkling]

and I wonder what the policy is for offers under the list price too... I would have to set a true minimum gross selling price in the contract. Commission fees are smaller the more valuable the piece is, I believe. They do however have an investment in my mind. Pro photography, safe keeping, handling the transfer of $$$ safely, a large audience/following of potential buyers, digital marketing etc- that is worth the fee IMO.

 

[denverappraiser]

10% is pretty much as cheap as they get but that is available. As David points out above, that comes with certain risks and I wouldn’t expect a lot in terms of ‘free’ work. Also don’t expect much in terms of advertising, trunk shows, presentations, spiffy photography, and probably not even a showroom experience for the buyer. You may not want these things anyway, but it’s good to go in knowing what you’re in for. As a rule, sales people like to promote the things that end in paychecks. Just sayin’.

 

[AllThingsSparkling]

Ending in a paycheck is definitely the idea! Even without trunk shows etc, places like JBG and GOG have followings. People (like me!) stalk their web listings all the time. GOG will also list on ebay i believe which is great because I personally would NEVER try to sell it on ebay myself, too many scammers, but i would trust them to list it and handle the transaction.

 

[AllThingsSparkling]

Also, a funny sidenote... my DH's late grandfather gave this ring to his grandmother by hiding it in a cloth napkin at dinner. When she went to unfold it, it just plopped out onto her plate and startled her! My husband should feel free to do the same with my napkin anytime

 

[Rockdiamond]

I would not limit the discussions to two vendors. PS has a very rich list of sponsor/ vendors. Others also sell on eBay.

Very cool stor about the presentation- I'll bet a seven ct boulder knocked her off her chair.
I surprised my wife with a 6ct round a few days after she had our youngest son. She almost had another baby

 

[AllThingsSparkling]

@Rockdiamond is there a list of PS preferred vendors somewhere? Thanks for your help. What a sweet gift for your wife!! Gosh I wish we'd just keep this stone because we're not going to see another one this size in my lifetime most likely, but alas it's not my call.

 

[Rockdiamond]

I'm posting from a phone so it's hard for me to navigate there- but the link is on the top right somewhere.

 

[denverappraiser]

eBay/Paypal fees alone are more than your budget, not that this seems like a reasonable eBay product to me anyway. Don't get me wrong, I love both of those companies, and their followings are EXACTLY the reasons to work with them. In both cases, it's likely to cost you more than that by the way, even with their deepest discount consignment programs (credit card fees alone are about 3% for example). By all means, ask them and don't take my word for it. Both are very cooperative companies and I"m sure they'll be happy to discuss it (as will others).

 

[denverappraiser]

You can find a list of PS sponsors under the 'Resources' tab at the top of the page.

 

[Rockdiamond]

You've confused me Neil ( which is pretty easy) What's the budget you're referring to and which two companies??
eBay charges 10% of the sale price with a max $750 on diamonds. For power sellers the max is $250.
I agree eBay seems unlikely but our own experience has proved sometimes high ticket items do get sold there.

 

[denverappraiser]

The budget I refer to is the 10% commission. Paypal is required so I'm including that. I didn't know about the max of $750 for diamonds in final auction fees so no, it's not the entire budget. I stand corrected. The point is that 10% doesn't go as far as you think.

 

[tracylt]

Wow this thread made me all excited, then not that excited anymore. For a good reason though. All experts here make perfect sense. My MIL is a diamond trader herself (private clients/customers only, big deals only). She has a few diamonds over 10 carat, and one is 23 carat round brilliant. My husband is the only child! I never paid much attention until I saw this thread. Almost had a heart attack thinking about what he might inherit when she passes away. From just her diamonds alone!
Ok, the heart attack part is just a joke. But I believe denverappraisal is right, I don't think you can get close to 50% of the retail price.
Regardless, I am curious about how this turns out for you and wish you the best of luck!

 

[AllThingsSparkling]

Wow this thread made me all excited, then not that excited anymore. For a good reason though. All experts here make perfect sense. My MIL is a diamond trader herself (private clients/customers only, big deals only). She has a few diamonds over 10 carat, and one is 23 carat round brilliant. My husband is the only child! I never paid much attention until I saw this thread. Almost had a heart attack thinking about what he might inherit when she passes away. From just her diamonds alone!
Ok, the heart attack part is just a joke. But I believe denverappraisal is right, I don't think you can get close to 50% of the retail price.
Regardless, I am curious about how this turns out for you and wish you the best of luck!

well hey is your MIL in the market for another honker? 23 carats OMG! Now that is a doorknob.

 

[tracylt]

well hey is your MIL in the market for another honker? 23 carats OMG! Now that is a doorknob.

I know right! Frankly I think it looks ridiculous considering it's a round shape. I saw her wearing it twice, at a cousin's wedding and at my daughter's 1st bday party. It literally looked like a freakin rice cup (that we asian use every meal) on her finger. I bet she got it for a super good deal though, that's how she survived in the diamond business despite having no physical stores. I wouldn't want to sell your MIL's stone to her, to be quite honest.

 

[Rockdiamond]

In all likelihood if a seller did find a an eBay buyer for it they would be a power seller so $250.
PayPal takes 3%
More likely payment would be by bank wire on a large amount - but I know there are plenty of six figure Amex sales.
Still- I don't think 10% will lure the best sellers. I could be wrong. Happens every day- just ask my wife
Seriously I'd guess the most able sellers will ask at least 20%.

I very much appreciate the discussion- it's a learning experience for me too

 

[denverappraiser]

But I believe denverappraisal is right, I don't think you can get close to 50% of the retail price.

That's not exactly what I said. The amount you can sell things for is not a function of 'retail' prices and retail prices can come from all sorts of sources that may or may not be useful. The example I gave earlier is a pretty good example. It's a 7.21/Q-R/VS1/fair and it was sold at retail for $45k 2 months ago. You'd be hard pressed to find a comp for that if you tried. That doesn't mean there is no market. Obviously, there is. Someone paid 45 bills for it, but it would be a problem to go to some jeweler and replace it. That one had a GIA at the time of sale but given that the lab date in only about 6 months before the sale, it surely came about as part of the sales process. We have no clue what the original owner THOUGHT they had before they sent it in. Normally family lore inflates these things and most jewelry store workers have zero experience with this sort of goods. A popular pricing guide with appraisers lists a 7.21/M/VS1 at $85,000+ 'wholesale' for example. (note, there's one in the retail database here for $61k, but that's another story). Mark up that $85k by 50% for 'replacement' price and we're at $128k without even trying. A lot of appraisers will double that wholesale number to get to retail. Is a Q-R worth more/less/equal to an M? That depends on what you want, and they aren't in the database here so it's of no assistance in finding comps. Most people would expect it to be less but, you know, when you NEED one, suddenly prices tend to climb. Is a 'fair' cut a problem? As with the above, for most people, yes, but that's part of why it's so big. Recutting that to ideal proportions would drop the size to 6 carats or so and cost thousands of dollars. That's a bite. Q-R isn't a big seller either way. Is a 6.0 'ideal' Q-R better than a 7.21 fair; enough better to be worth the cost and risk of things not working out to get there? Maybe. Maybe not. The last owner decided not, and I certainly won't second-guess them without more info. That's the sort of question I'm suggesting would be helpful to consult with a pro. We don't know the path that led to their decision to sell it the way they did, only the results. That is not a particularly easy thing to sell and in that probably played a roll in how it ended up at Christies. They're pretty good at selling unusual and expensive things.