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Diamond Appraisal Vs Fair Market Price


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#1 adin

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Posted 02 March 2009 - 04:46 PM

Hello,

I was wondering what a fair price is for a diamond that has been appraised for 16,000 dollars.

Its a old mine cut 2.42ct J/VS2.

Also, with the terrible economy, is now even a good time to consider selling?

I spoke to someone in the business who said he could get me between 6500 and 7000 but how do I know what fair market value is and does it flucuate?

Any info would help.


thank you

#2 denverappraiser

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Posted 02 March 2009 - 05:30 PM

A capable appraiser should be able to tell you what you can expect on resale, as well as give you recommendations on designing a sales strategy. The first obvious question is who graded it J/VS2 and what do they have to back that up? This is a pretty important bit of information and most potential buyers are going to want that from a credible source.

Appraisals, and appraisers, are not all the same so knowing that it appraised for $16k says remarkably little. When you call up your appraiser, be clear what you want to know. The correct answer to the wrong question is doing you no favors. In most cases, ‘appraisal’ values are an estimate of the retail replacement cost new in the local marketplace for a stone like the one you have. This is perhaps interesting but it has very little to do with your situation. There are lots of other definitions of 'value' that can be applied and yours is one of them.

Neil

Edited by denverappraiser, 02 March 2009 - 05:52 PM.

Neil Beaty
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Professional Appraisals in Denver

#3 adin

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Posted 03 March 2009 - 04:56 AM

Hello,

I was wondering what a fair price is for a diamond that has been appraised for 16,000 dollars.

Its a old mine cut 2.42ct J/VS2.

Also, with the terrible economy, is now even a good time to consider selling?

I spoke to someone in the business who said he could get me between 6500 and 7000 but how do I know what fair market value is and does it flucuate?

Any info would help.


thank you



#4 adin

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Posted 03 March 2009 - 05:26 AM

Neil,

Thanks again for getting back to me. The appraiser is a gemologist with the following suffix after his last name GG (GIA #4985672). I completely understand that the appraisal is a "pumped up number for insurance purposes".

I forwarded this appraisal to a guy in town whos job is to buy and sell diamonds. He says that he could get me between 6500 and 7000k for this diamond with the appraisal in hand.

I understand that everyone needs to make money in this transaction but I also dont want to be "taken". I just want it to be fair.

I had it appraised last summer and should have taken better notes on resale value.

I do appreciate all of your guidance.

thanks

#5 davidelevi

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Posted 03 March 2009 - 06:02 AM

Adin, I think what Neil was saying is that the appraisal you have is basically worthless to assess the resale value of the diamond; in fact I'd say it's dangerous, since it has now set your expectations that you have a $16,000 diamond. This not because of the competency or otherwise of the appraiser, but because the question you were asking him was a substantially different one from the one you are asking now.

If you felt you could trust the appraiser you saw a few months ago, by all means go back and ask him again to appraise the stone for resale to a local broker or to a private individual (if you are comfortable with that). Disregard the first appraisal completely.
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#6 denverappraiser

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Posted 03 March 2009 - 08:57 AM

Thanks for the succinct summary. The first appraisal simply doesn’t apply.

Given the description is correct, which is a big assumption, $7k is a surprisingly strong dealer bid but I do have a question about it. He ‘can get you’ between $6500 - $7000 for it sounds curiously like an offer for a consignment deal rather than a bid to buy. What is being proposed here? Is he offering to buy it, broker it to someone else and take a commission (from them) or sell it for you and take a commission (from you)? Is the $6500 figure the net proceeds to you or will you owe a commission from this? If you take this deal will he pay immediately or do you need to wait until he finds a buyer?

Neil
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Professional Appraisals in Denver

#7 diamondsbylauren

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Posted 03 March 2009 - 01:34 PM

I think it's valuable to point out how this type of deal works.
Say a jewelry store is selling a diamond for $10,000.
Let's say they paid the wholesale dealer they bought it from $7000.
If a consumer walks in with the identical diamond to sell , the store can't offer more than say...$3500.
When they buy it from their normal sources they usually get time to pay, and have certainty about what they are buying.
Buying off the street entails a lot more risk, hence the lower price a consumer can expect.

I think it's a shame that many places that do buy off the street don't explain this to the consumer- instead telling them the item is worth a lot less because it's ugly..yada, yada