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appraisal less than half purchase price 10 yrs ago


dnb
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We bought a diamond wedding ring from a large, higher end jewler 10 yrs ago for $6,000. We recently had it appraised at same jeweler for ins puposes and it came in at $2500. We feel duped, thinking that the price should have escalated over this period.

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This is a pretty unusual situation. Mind you it’s not uncommon for appraisals of the same or a similar item to produce wildly different numbers but there are usually several different appraisers involved. There is a pretty standard list of reasons for it:

 

#1 One or both appraisers simply made a mistake.

 

#2. One or both didn’t correctly describe the piece. Compare the descriptions to make sure they are the same. If you see a discrepancy in the weights or grading of the stones, call up the appraiser and ask them if they are confident in their grading and explain the problem to them. If necessary, give them the opportunity to re-examine the piece. There should be no charge for this and they may have a pretty good theory for what the difference is or at least be able to defend their position.

 

#3. The appraisers are describing different marketplaces or are using a different definiiton of value. This is usually the heart of the issue. Any statement of value must contain an element of what it’s worth to whom, when, and under what circumstances or it isn’t very useful information. The same item can have vastly different values in different circumstances after all. Read the text of both appraisals in the ‘fine print’ section and make sure they are answering the same question. If it's missing from either or both appraisals, ignore the value conclusion entirely.

 

#4 One or both appraisers is perusing a different agenda than that of providing you with truthful and accurate information.

 

#5. One or both appraisers is simply wrong.

 

Contact the appraiser who signed the recent report and discuss the matter with them. If they want, let them see it again, show them the other document and ask specific questions about the differences. If they don’t end up with a satisfactory explanation, seek out an independent appraisal to get a feel for what the facts really are. Frankly, I recommend getting an independent anyway but since you’ve already paid for this one, you might as well get ‘the rest of the story’.

 

Neil

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