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Value of Appraisal after Purchase

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kace

Rough_Rock
Joined
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We purchased a loose diamond already (before we found PS - our bad luck). Currently, the diamond is at the store waiting to be sent to Vatche for x-prong setting (Vatche is closed til 7/18). Is there any value in obtaining an appraisal for the diamond even though we cannot return it? And can a diamond be appraised after it has been set? TIA.
 
We got our diamond appraised loose because it was GIA certified, and in order for our appraiser to verify the cut (and put it on their insurance appraisal), they needed the loose stone to measure the crown and pavillion angles and depth. They told me that had it come with an AGS cert that listed all the pertinent cut info, they would have been fine with appraising it after it was set. At that point they would measure what they could and verify that it matched the AGS cert, and would use the cert info on their appraisal.
We wanted the diamond appraised in a way that would let us get as much info in the insurance appraisal so that we could have the best chances of getting a similar quality replacement in case of anything happening to our stone.
Hope that helps a bit!
 

Thanks, DRK. Which appraiser did you use? I thought most appraisers do not estimate the $$ value of a diamond/ring. It would be great to find an appraiser that does it all.

 
Our diamond came with an appraisal from GoodOldGold. We had it appraised by Howard Weinstein associates in Toronto, since we needed a local CDN $ appraisal in order to get it insured (according to our insurance company). I sent in the super detailed GOG appraisal too, so that they have ALL the info on hand if anything were to happen. The Toronto appraiser didn''t run it through a brilliancescope or show the hearts and arrows or anything.
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I think most appraisers will do a detailed appraisal of a ring and estimate the retail replacement value for insurance purposes.

A number of people on here have either located an independent appraiser in their town ( http://www.pricescope.com/appr_list.aspx ) and had their diamonds sent there for appraisal, and many have used the services of some of the appraisers who post here regularly and seemed very pleased with the service and reports they got:
Rockdoc http://www.consumersgemlab.com/
Richard Sherwood http://www.sarasotagemlab.com/
Dave Atlas http://www.gemappraisers.com/
Neil Beaty http://www.gemlab.us/

Here''s a link to another thread asking the same question as you (the search function on this forum can turn up good reading on almost every topic): https://www.pricescope.com/community/threads/appraisal-while-in-the-setting.29934/=

Drk
 
Hi Kace,
Sure, a complete appraisal is a geat thing to have- if you are interested in all the angles on the diamond, then for sure, a sarin.
These measurements must be taken loose.

Regadng the need for specific appraisals.
There's two main reasons you'd want an appraisal after purchase.
Insurance- an appraisal issued by the seller will suffice in most cases. As opposed to drk's experience in Canada.
In the US things are different. You do not need crown angle, etc.
You may not even need a GIA report.
If you bought a one carat diamond for $2000 for example, a basic appraisal from a reputable source is fine. This type of appraisal would not require such presice measuremnt of the the diamond, and can be written if the diamond is set.

If you paid more than $4000 fo your diamond, hopefully it has a GIA Report.
Say you have a valuable home with a large policy and you buy a ring for $50,000.
You may need a rider specifically for the ring, and you would probably need a GIA report.
At some point, you might need secondary type verficiation - but likely we're tslking values over $100K. Still, you would not need crown angles and pavillion depths. A GIA report with LxWxD measurements in mm will do.

Validation of purchase- in this case you'd clearly want a third party opinion.

Maybe some of the appraisers that frequesnt the boad will comment- they are the true experts on these questions.

 
TIA,

The value of an appraisal session will depend on your purpose. As you point out, many of the people here are seeking appraisal services as part of their shopping process and, for this purpose, it’s usually better to examine major gemstones unmounted whenever possible. In many cases it is also helpful to get a final appraisal after the setting job is done to examine the quality of the mounting and the setting craftsmanship. It’s a shame to spend a ton on effort to get exactly the right diamond and then have it set poorly. A good appraiser will address these issue.

In the case of insurance documentation, the requirements usually revolve around providing a complete and accurate description of the item so that your insurance company can make a replacement in the case of a loss. Most vendors will provide some sort of a report that meets the minimum standards of the insurance company for free or for a nominal fee but this may or may not contain all of the information that you consider important. For picky customers they usually don’t. This description will be used as a purchase order if the insurance company needs to make a replacement and the insurance companies are perfectly happy to have broad leeway. Approx 1.00ct., VS-SI, GH diamond in a 14k mounting’ can be an awful lot of things, some of which will be acceptable to you and some will probably not be. (Note: most insurance companies will bind a policy based on this description). It is in your best interest to have considerably higher standards and this regularly involves a professional appraiser who examines the piece after the final assembly.


Here are some thoughts on getting good value out of an appraisal session that may be helpful.


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

 
You buy insurance to put you back where you were before the lose or damage.
The more documentation and paperwork you have the better the odds of getting a like item to the one lost or damaged.

legally all they have to do under the contract is get you something that matches the documentation/description you submitted when the policy was bound.
The better that documnetation the better off you are.

In steps a good appraiser who does high detailed reports.
Most appraisals iv seen localy arent worth the paper they are printed on so ask to see examples and ask how they get the values they put on it.
 
True about bad appraisals stmdrmr ( what does your handle mean anyway???) we''ve seen plenty of unbelievably inaccurate store appraisals.
it''s true- having a detailed description is always good- BUT- I do not see an insurance company tryign to find a stone with matching crown angles to satisfy a policyholder. In cases of insurance companies offering repacement diamonds, I''d be quite leary of them being able to satisy a "Cut monger"
In many cases insurace companies assign a monetary value, and pay.


Neil- I have a question about the value put on an appraisal.
Take an item that is sold in a high end jewelry store for $10,000.
Say that you could buy that diamond from ...Blue Nile ( for example) for $7500.

the retail jeweler could make the case that a more expensive store could charge $12,500 - and then put that down as a replacement value.
Blue Nile could concievably appraise for their selling price- so you could actually have the same item appraised at almost double the value by a different appraiser.

Leading to the question:
Aren''y replacement values arbitrary- doesn''t an appraiser have HUGE leeway siimply due to the differing prices in differnent stores?
 
it is short for storm rider.

The vlue issue is a real concern.
Richard Sherwood gets around the pricing issue by putting values in multiple markets on his report.


In general Id go with the number thats closest to purchace price + 30% this should cover me for 3 years or so of price increases without overpaying too much.

As far as replacing it down to the crown angles the client has the right to a stone in the same quality class.
If that is a super tight super-ideal then that is what the insurance company owes them if it was properly described when insured.
 
Date: 7/13/2005 2:59:38 PM
Author: diamondsbylauren
True about bad appraisals stmdrmr ( what does your handle mean anyway???) we''ve seen plenty of unbelievably inaccurate store appraisals.

it''s true- having a detailed description is always good- BUT- I do not see an insurance company tryign to find a stone with matching crown angles to satisfy a policyholder. In cases of insurance companies offering repacement diamonds, I''d be quite leary of them being able to satisy a ''Cut monger''
Click to expand...

Well I''ll let you know in a few days. I DID send in details, I am currently working toward a replacement. And we''ll see.
 

David,


RE: Cut snobs and insurance,
If they agree to bind a policy then, yes, they do have to satisfy the cut mongers. It happens all the time. If they bind a policy on a stone that has a 30 degree crown angle and it’s specified as such in the report, they have 3 options for processing a loss.

1) They can find a comparable 30 degree stone.
2) They can convince the customer to accept something else, like 34.5 degrees (most people consider this to be better but it’s the client’s call. They may like 30 better and they may have searched long and hard to find it.)
3) They can cash out the policy for the face value.

Special Note: I''m speaking about insurance in general terms. The details of individual policies vary considerably and it''s the words of the contract that will apply, not the opinions of some appraiser in Colorado.
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RE: Valuation,
Arbitrary is a pretty harsh word but yes, there is some judgment going on. It’s terribly important to properly describe both the product and the marketplace for any statement of valuation to be useful. As you point out, markets can vary considerably. Superficially similar products can also vary. The presence of designer branding, warranties, trade up privileges etc. have a substantial effect on value. For example, if a client buys a stone from a dealer who offers free cash refunds forever and then loses it. If the company chooses to replace at a different source that does not offer this feature, the client has not been made whole. The resultant stone is, in a very real sense, worth less than the one it’s replacing. The fact that BlueNile may have a similar stone for a lower price does not necessarily apply. Similarly, an appraiser can do a valuation on the same item, for the same client, but in different marketplaces and get a completely different result.

Unfortunately, the whole valuation thing is considerably more difficult than taking a formula to Rap and announcing a number.


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

Wow - thanks for that last post. Since I am in the process of this very thing now, knowing that I''m not crazy for wanting a replacement that is as good as a cut as I got originally, is nice.

A few hours ago I just explained to them that I wanted an H&A stone. That''s what I had, that''s what I want - but they were offering me a non H&A stone. And also -- when I told them I didn''t want a depth beyond 61 they said ok - we have this H&A but it''s 63%. So I hope to continue this process.

But more importantly - you mentioned something that I TOTALLY forgot. The "Trade in Policy". You are right- as a consumer I considered this before I selected the place I purchased from. I doubt the person they put me in contact with now.. will give me the same option.

Thanks for sharing! So helpful right now!
 
Neil,
it sounds, in essence, that you agree that any number placed as a value on an appraisal is arbitrary.
Even if an appraiser does due dillengance, the maket prices vary so much that any price is going to be wrong somewhere.

Or not.
 
Date: 7/13/2005 4:13:23 PM
Author: laney
DenverAppraiser



A few hours ago I just explained to them that I wanted an H&A stone. That''s what I had, that''s what I want - but they were offering me a non H&A stone. And also -- when I told them I didn''t want a depth beyond 61 they said ok - we have this H&A but it''s 63%.

Laney- this point out the problems using temrs like "Ideal" or "Hearts and Arrows" there''s just NO way to be sure which hearts or which arrows???!! Are these "Broken Arrows???"

I think someone in the position of trying to buy a replacement diamond using crown angles as their main choosing point can be sorely dissapointed with the results.
Click to expand...
 
Date: 7/13/2005 4:18:22 PM
Author: diamondsbylauren
Date: 7/13/2005 4:13:23 PM

Author: laney

Laney- this point out the problems using temrs like ''Ideal'' or ''Hearts and Arrows'' there''s just NO way to be sure which hearts or which arrows???!! Are these ''Broken Arrows???''


I think someone in the position of trying to buy a replacement diamond using crown angles as their main choosing point can be sorely dissapointed with the results.
Click to expand...
Click to expand...

Well, when I insured the diamond, I sent in quite a bit of detail, everything from the AGS report to the SARIN, Brilliancescope, I2See reports. I included magnified images, as well as lightscope, and hearts and arrows images.

My stone was engraved with H&A and the AGS certificate number.

So, I paid a premium for an H&A stone vs, a non H&A stone. I prefer the look of that particular "cut", and that is one of the reasons I selected and paid that price.

I am not naive enough to believe that I will get the "full" amount listed on my appraisal for a replacement stone. I understand how insurance companies work. That''s no problem.

What is a problem is if they say.. you can *only* replace it with this stone that doesn''t have that "feature". The I feel like it is not "like & kind". (this has not happened yet..)

I''m not sure what you mean by "Broken Arrows"?
 
Date: 7/13/2005 4:14:37 PM
Author: diamondsbylauren
Neil,
it sounds, in essence, that you agree that any number placed as a value on an appraisal is arbitrary.
Even if an appraiser does due dillengance, the maket prices vary so much that any price is going to be wrong somewhere.

Or not.
Click to expand...
David,

Again I take exception to your choice of words. It''s not arbitrary. It''s an expert opinion about how a particular piece of property should be expected to perform in a particular marketplace on a particular date.

Or not. Not all appraisers are the same.


Laney,

Read your policy. Pay special attention to the section where they describe the missing item and the section where they explain how how replacements will be handled. Many insurance companies have supplemental information on their websites that explain some of their terms. Read up on ''like kind and quality'' and ''actual cash value'' if they appear in the contract. You usually have the right to go back to the original selling jeweler for the replacement if you insist.

Neil Beaty
GG(GIA) ISA NAJA
Independent Appraisals in Denver
 
Thanks again Denver Appraiser,

I am only in the middle of this process now, and I have been told by the adjuster that I can "contact my jeweler". However, when I ask more details, I get no response (at the moment). So I am sending friendly e-mails for clarification.

It''s all a learning process.. glad pscope is here!
 
Point well taken Neil- arbitrary is a poor choice of words. Arbitrary makes it sound ....un-educated, or ill advised.
I''m straining the mental thesaurus.......
Anybody got a word? Here''s the meaning :
An advised opinion which can vary by a large percentage, and yet still be considered reasonable.

Laney- I am with you- you originally purchased a diamond for it''s H&A patter- you ttok the time to research exactly the type of cut you wanted, then got it.
In a case like that I hope the insurance company allows you a lot of input- or simply pays you enough to replace the diamond.
Since you did it once, you already knwo what type of numbers you are looking for.

Another interesting question:
Say you purchased the diamond in 2002.
Today, it might cost as much as 35% more to replace it witrh a like cut, color ,clarity carat weight.
If you have a "replacement " wording in your policy then I would think you should get more than you paid
 
Date: 7/13/2005 2:59:38 PM
Author: diamondsbylauren

Aren't replacement values arbitrary- doesn't an appraiser have HUGE leeway simply due to the differing prices in different stores?
Click to expand...

Hi Dave. Most appraisers appraise at the "average" retail value for their geographical area. They take into account the selling prices (not the mythical pie-in-the-sky prices) of the typical retailers and come up with an average. In my case, I usually throw out the highest and lowest prices which don't fall in the mainstream "grouping" of prices, when figuring that average.

This grouping from which the appraiser draws his average doesn't usually vary by the huge range which many people think. Except for the "red herrings", most retailers are competitive and fairly close on their pricing.

Appraisers would have a hard time justifying very high (or very low) prices which fall out of this average. I know it's done all the time by non-independent appraisers working out of retail stores to make the selling price seem good, but you don't find it done much by independent appraisers who make their living doing appraisals. There's no advantage to them in doing this.

I use an average retail replacement value as the figure on my appraisal, and then if the customer requests, I give them a multi-level market breakdown on the critique/consultation portion of my report. That breakdown covers "low (sale} retail" and "expected internet pricing" in addition to the "average retail" listed on the appraisal.

This usually conveys to the consumer the different pricing which occurs as a result of different vendors operating with different overheads and offering different add-on services, all of which is reasonable and understandable.

Independent appraisers also usually know of and adhere to well-researched sliding scale markups which decrease as the wholesale value of the items increases.

It's only "arbitrary" if you have an "arbitrary" appraiser. In the trade, we refer to those guys as "prostitute appraisers". Otherwise, it is a (hopefully) knowledgeable opinion by a (hopefully) knowledgeable individual who is (hopefully) expert in his field.
 
Hi Richard- what an eloquent, complete explaination of why independant appraisers have NOTHING in common with the typical in store "hack" appraisal.

Here''s how we handle our in store hack appraisals
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:
We explain that we can issue the appraisal at the actual selling price, or any number up to about double ( depending on the item) then we leave it in the customer''s hands.
Of course the only reason for the retail replacement value on a seller''s appraisal is for insurance.An independant appraiser has a much larger responsibility- after a purchase, the consumer wishing to validate a purchase is NOT interested in an arbitrary value- they would want a price ascertained exactly the way Richard explained!


I appreciate the time Neil and Richard took to helop claify this important issue.
 
Date: 7/13/2005 8:17:27 PM
Author: diamondsbylauren

Here''s how we handle our in store hack appraisals
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:
We explain that we can issue the appraisal at the actual selling price, or any number up to about double ( depending on the item) then we leave it in the customer''s hands.
Click to expand...
I''m not gonna touch that with a ten foot pole, David.

I appreciate your chutzpah in posting it on an international forum though.

I''ve got the number for a good attorney if you should ever need one.
 
Richard, I truly appreciate the warning.
I am learning a lot in this thread.

If we, as the seller, claim that the item could be sold at a higher price elsewhere, and that is based in fact- can we not use some degree of latitude?.
For example.
Say someone buys a 1.50 D/VVS2 Pear Shape from Blue Nile- or another aggressive internet seller.
Say they paid $13k for the stone ( about 10% below rap).
Could a claim not be made that if a store like the one with the little blue bag had such a stone, they might charge $20k, or even a bit more?
Certainly, many fine retail stores which are much more reasonable than 5th avenue stores carry this type of stone and would charge about $16k.
The point is- putting a value on a diamond is not possible to do exactly- there's a range. It would seem that picking any number in the range could be considered legit, if a single price is called for, like on an insuranace appraisal. Of course average is probably the best way- as Richard has suggested.
Our appraisal form has a disclaimer, as do every one I've ever seen.

We discuss this all our clients. Most prefer to go with an appraisal slightly higher than what they paid, but not a lot more.

Clearly, an appraisal from the guys posting here ( Richard, and Neil) would be far more comprehensive than any sellers appraisal
 
Hi Everyone

Interesting discussion how a replacement value is reached.


The primary problem David is that SELLERS CAN"T OR SHOULDN"T AUTHOR APPRAISALS. Look at the legal definition of an appraisal ( www.uspap.org ). It REQUIRES that an appraisal must be independent.

If you''re the seller, there are two ways to address this.

One is to not call it an appraisal, but call it "Statement to Replace This Item In Our Store"
The report should clearly state that you are doing this because you have an interest in this item.

Two is to call it an Appraisal, but make a statement of your interest in the item, and narratively disclose the selling price and WHY ( if so ) the valuation amount is different from the selling price. This also involves disclosure of what research was done to support this. Although few sellers would do this, and that is when, if there is a future problem they can be held responsible to anyone who relied on the report.

It is vastly important if you don''t have education in valuation ( not just gemology ) that you avoid doing appraisals.

For an insurance appraisal function, Richard''s approach to reporting multiple markets ranges is very justified. An appraiser should be providing all the relevant facts, and letting the insured and the insurance company make the decision as to which value is the proper one to use.

If you are authoring an appraisal for insurance without knowing how the company settles its claims, you could be held professionally negligent.

Also those sellers who appraise an item for more than it was sold for without disclosure affects the material risk of the insurance company, and if not disclosed many policies state they have the option of vacated the claim ( denying payment of the claim and refunding the premiums). This is rarely done, but it has been in extreme cases.

Storm''s opinion of insuring an item for the purchase price plus 30% is foolish. This is Alice in Wonderland valuation and Crystal Ball appraising. Since securing the appraisal is the responsibility of the insured, consumers should check with their appraiser''s periodically to see if an update of the valuation is needed due to ACTUAL market price increases, that are relevant to how a claim is paid. I will concede this has some limited "value" during a market that is rising, for a policy that doesn''t have an inflation guard endorsement built in, but in a level market it isn''t factual or supportable, and causes the client to overpay premiums. The other side of the coin is if this happens, who is liable. In some states, insurance companies are supposed to refund the premium "overcharges" if there is a loss and the item IS replaced for less. However, most consumers don''t know about this, and many insurance companies don''t offer, unless informed, In other states, (such as California) the Insurance Commisioner there is of the opinion that if the appraiser caused the overpayment,
the appraiser is liable since it is the insured who supplied the appraisal to the insurance company.


Those doing appraisal have the obligation to know the ramifications that apply in each state, as they vary tremendously, and also with the type of policy purchased by the consumer. Also be aware that some companies have several different types of policies which can drastically vary in their coverages.

Rockdoc
 
Date: 7/14/2005 2:53:21 AM
Author: RockDoc

The primary problem David is that SELLERS CAN'T OR SHOULDN'T AUTHOR APPRAISALS. Look at the legal definition of an appraisal ( www.uspap.org ). It REQUIRES that an appraisal must be independent.
Click to expand...
I used an independent appraiser, and under many circumstances, would recommend one, but who is uspap.org; I can't get the link to work?

Regardless, it seems a distinction that is without a difference. When appraisals are written by stores, or ones knowledgeable grandmother (so far as I know), the insurance company -- regulated and licensed to do it's business -- accepts it and goes forward, ready to do its business.

Right?

Regards,
 
Date: 7/13/2005 11:23:59 PM
Author: diamondsbylauren

If we, as the seller, claim that the item could be sold at a higher price elsewhere, and that is based in fact- can we not use some degree of latitude?.
Click to expand...

Sure, just as you use some latitude in arriving at your selling price. As long as it is reasonable, you'll probably never get called out on it.

Let's say it's unreasonable though. Let's say you let your client pick a high number for their appraisal which you issue. You mentioned previously that you let them pick a number from what they paid for it to up to double, on certain pieces. I'm sure there's plenty of clients who go for the high number, to impress their fiancee's, etc.

Let's say then the engagement goes sour, and the appraisal you issued is used in the resale of the diamond, with the new buyer using it in his buying decision and paying substantially more than what would be considered average retail value.

Upon discovery of this, the new buyer has the option of suing you for what he considers his loss, based on your appraisal. In fact, in most states he can sue you for triple damages.

Unlikely? In most instances, yes. But it is becoming increasingly common in the realm of high dollar goods, such as you deal in. Buyers are beginning to hold "experts" responsible for their written statements of value. As an expert in the fancy colored diamond field, you carry a much greater responsibility and risk than a non-expert.

I've seen the above scenario happen several times here in Florida. In one instance, the judge issued a $126,000 judgement against the appraiser for a flagrant violation of reasonableness in his valuation. This was triple damages over what the plaintiff claimed they lost relying on the appraiser's documentation.

Many vendors have quit issuing appraisals on their own merchandise because of the increased risk in today's litigious business climate (unless they follow the two options RockDoc mentioned). It's smarter to let a non-involved third-party expert who does appraisals for a living take the risk. It's also much more reassuring to the buyer, and cuts down on the rate of returns.
 
Great points guys!!!

I always tell people that OUR appraisal values ( not the specific identifications) are arbitrary- sorry for the use of the word again. IN the case of informing clients, it''s another way of us letting them know the appraisal is OUR opinion- and as the seller, our opinion could easily be questioned. Of course we take no offense to this- when I buy something expensive off the internet, I operate using caution- I expect folks to be cautious- it''s smart!

In many cases, our clients use the detailed "Appraisal" we offer to verify thier purchase.
This gives the average appraiser a detailed roadmap of what we claim the diamond to be.
So, if a buyer asks for a sellers appraisal, in a way, that binds the seller to meet the grades expressed within- at least that''s how WE look at it.
I use the term "average appraiser"- the appraisers posting in this thread are so far above the "average" it''s not funny. that''s why our detailed appraisal is useful- many people are buying yellow diamonds which the typical appraiser knows little about.


Rich I really did speak ( write) a little loosely about doubling values.
When we sell something for $3,500, a $7000 appraisal may be in order, if the buyer asks. Again- we make it clear that the item is worth exactly what they are paying- but that a higher priced seller may charge more.
But when a person pbuys something over $10K, the rules we use are different.
If we sell for $10k I will NOT appraise for $20,000.
As the items get more expensvie, the difference between the least expensive to the most expensive seller shrink
 

David,


You’re on thin ice, liability wise. It’s a good habit to give your clients paperwork to document the details about what they are buying but it’s ill advised to call this document an appraisal. I’m guessing that you don’t include much in the way of explanation of how you generate your numbers and what precisely they mean. This leaves you open to all sorts of misinterpretations of what is meant by the values that you describe. Calling it ‘insurance value’ with no clarification is useless, as is the clause that says ‘we take no responsibility for the opinions given. As Richard pointed out above, you could clearly be identified as an expert in this subject and an ‘appraisal’ signed by or even provided by you is a legal document. If someone relies on this opinion and decides they have been harmed, you can get sued. The scenario that Richard described has happened here in Colorado as well. Perhaps you have less to worry about, people in New York are much more reasonable.


What I recommend you do is give your clients a report that fully describes what you are selling and indicates the actual transaction price, clearly marked as such and that clearly identifies that you are the seller. Title this document ‘Jewelry Documentation’, ‘Jewelry Information Report’ or something similar, not ‘Appraisal’. This will more than fulfill the paperwork requirements of most insurance companies. If they want an appraisal so that they can properly document the great bargain that you are giving them or so that they can compare with the prices or products of some alternative supplier, send them to an appraiser, preferably one that knows what they are doing.


Neil Beaty
GG(GIA) ISA NAJA
Independent Appraisals in Denver
 
ROCKDOC- I totally agree that those with no experience or education in valuation and gemology have NO business writing ANY sort of identification documentation on diamonds or jewelry.

THANK YOU Neil!!! I like the title- "Jewelry Documentation"
Will that title allow consumers to use the document to obtain insurance??

BTW- People in Colorado are quite unreasonable compared to New Yawkas
31.gif

Let''s just hope the lady who bought the .05 diamond I appraised at $500,000 is not reading this....heheheh

My goal with this document is to allow the buyer to use it as our word as to the description of the item- for third party verification if the buyer wishes.
And of course, to be useful for those that simply want to use the document for the purpose of insuring their diamond. Many people are comfortable with thier dealers and simply want a paper to present to the insurance company to allow insurance.
If sellers can offer such a document they do a service to their customers- not all of whom wish to go thru the effort and expense of bringing the article to a third party.
Not that I discourage that- but it''s not manditory in every case.

Here''s what we print about the value:
The estimated retail replacement value of the above described diamond ring is £!@#.

Is that OK?
 
Date: 7/14/2005 3:30:25 AM
Author: Regular Guy


Date: 7/14/2005 2:53:21 AM
Author: RockDoc

The primary problem David is that SELLERS CAN'T OR SHOULDN'T AUTHOR APPRAISALS. Look at the legal definition of an appraisal ( www.uspap.org ). It REQUIRES that an appraisal must be independent.
Click to expand...
I used an independent appraiser, and under many circumstances, would recommend one, but who is uspap.org; I can't get the link to work?

Regardless, it seems a distinction that is without a difference. When appraisals are written by stores, or ones knowledgeable grandmother (so far as I know), the insurance company -- regulated and licensed to do it's business -- accepts it and goes forward, ready to do its business.

Right?

Regards,
Click to expand...

Hey Ira and others....


Sorry wrong URL It's http://www.appraisalfoundation.org then click on USPAP, and then on the updated standards.
Much of it is for Real Estate and Business Valuation, but standards 7 and 8 cover personal property. Also review general definitions for appraisal.

Rockdoc
 
Date: 7/14/2005 5:31:49 PM
Author: diamondsbylauren

My goal with this document is to allow the buyer to use it as our word as to the description of the item- for third party verification if the buyer wishes.
And of course, to be useful for those that simply want to use the document for the purpose of insuring their diamond. Many people are comfortable with thier dealers and simply want a paper to present to the insurance company to allow insurance.
If sellers can offer such a document they do a service to their customers- not all of whom wish to go thru the effort and expense of bringing the article to a third party.
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David,

I have little doubt that your clients are well served by the reports you provide. Most insurance companies are happy to accept almost anything for purposes of binding a policy. It's in the client's best interest to have a decent description but there is no particular reason that the seller can't supply this and the needs of most clients are completely met without the inconvenience and expense of using a 3rd party appraiser.

The advice of 'Jewelry Documentation' is straight from the JVC guidlines on this matter and the companies are well accustomed to it. I've seen and even prepared this sort of report hundreds of times and never heard of an objection over it. The problem comes when the document is presented as a 3rd party expert opinion that is contrary to known fact. You are an expert in colored diamonds, probably many other things as well. You are not an expert in the retail prices charged by unnamed jewelers, presumably your competitors, who are probably operating in marketplaces that is substantially different from your own.

You have a known fact: You just sold the item for a particular price in a particular market in an arms length transaction. You know this because you were the seller. Why is this not the 'value'? I'll speculate. Presumably your appraisal presents a different price because you are describing a different marketplace, a different date or perhaps even a different product. Fine, but if you're going to make these sorts of assumptions you need to clearly state them in the body of the report or there is certain to be some serious confusion on the part of the reader. "Estimated Retail Replacement Value" is not an explanation.

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