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Need Advice On 1.51ct Round Diamond


itsphake
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I have my eyes on the following diamond from a local jeweler in Southern California.

 

Carat: 1.51

Shape: Round

Color: E

Clarify: SI1

Cut: EX

Polish: VG

Symmetry: VG

Flourescence: None

Certificate: GIA

 

I think it's medium to thick.

 

The jeweler quoted me $11400 for the stone. If I do purchase from this jeweler I am having him make a replica of the Jewels By Star Forever Rose Platinum Cathedral Solitaire Semi-Mount setting. I found a URL for this setting here.

 

http://www.michaelcfina.com/ic/mcfina/sect...10.html?block=1

 

I'm going after value rather than price. He seems to be a pretty honest dealer and has had his business since 1985. He sometimes comes off as pushy though and tries to rush me through the viewing process. I'm just looking for a jeweler that I can trust and gives me the best diamond that I can buy for my budget and one I can continue to have a good relaionship to turn to for future purchases.

 

Some advice I need is I want to get the ring insured and get a complete appraisal performed by an independent gem appraiser. Do you suggest that I get the loose stone appraised or wait until the stone is mounted and take the whole ring to get appraised? I would do this after I purchase the ring. The issue I'm facing is I've approached the dealer with this plan that I want to have the ring insured and therefore need to have it appraised by an independent professional gem appraiser. His major concern is if I take it to have appraised the appraiser might intentially switch the stone on me with a lower quality stone and appraise it lower. I don't know how often this occurs if you bring it to a professional appraiser. I mean why would s/he risk their professoinal reputation by practicing dishonest business principles? I've read online stories about consumers diamonds getting switched, but usually it involves a sleazy person who tries to throw all this sales lingo at you to attempt a quick sale. The dealer wants to protect himself from that kind of practice in the event I return and tell him that the diamond was appraised lower than the GIA certificate (not sure if that's common or possible). One other thing I'm wondering about is what happens if the diamond is appraised with a lower market value than what I purchased? Is the dealer required to lower their price to that price and give me back the difference? I'm going to confirm b4 making any purchase that his company provides a 100% return policy or something along those lines within 30-days. The duration can be shorter because I plan on getting the ring appraised right away. I want the peace of mind knowing that if I don't have a stone that matches what is described and sold to me then I can have my money refunded. My intention is not for the dealer to make as little profit as possible. I want him to make profit just as much as I want to feel confident that I got the best diamond for the money. I apologize if these questions seem elementary. I have done a lot of reading on this, but I think this forum can provide invaluable advice.

 

Bernard

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You’ve got several issues going. Consider why you are getting an appraisal. You’ve included several different reasons and they don't all lead in the same direction.

 

Most insurance contracts are agreeing to replace a lost item with another of ‘like kind and quality’ and the document you are submitting will serve as the purchase order for this replacement in the case of a loss. It is not necessary that this be prepared by an appraiser, much less an independent although they are generally better prepared to do it well. The insurance companies will accept almost anything and the more ambiguous it is the more they like it, it’s you that should be picky.

 

You seem to be worried about documenting that the stone is as it’s described by the seller. For this you definitely need an appraiser. It’s also best to do this before the stone is set because the stone can be more thoroughly inspected. If you have some issue with the stone it’s far better to address it before the stone is mounted. In many cases, setting the stone will void your privileges so make sure to read the fine print.

 

You’ve expressed a concern about using the appraisal to decide if you are paying an appropriate price. Obviously dealer supplied valuations are useless for this and it again requires an appraisal and it should be an independent. Telling a client that this is a bad deal and that you would do better to take it back and buy one from them is a serious ethics problem for an appraiser but it seems to happen with some frequency and the dealers are justifiably concerned about it. That’s not an appraisal, it’s an advertisement.

 

Most appraisals are not done for ‘market value’ by the way. The definition of value will vary depending on your stated purpose but a significant fraction of jewelry appraisals are written to provide funding for an insurance company to replace the lost item with another of like kind and quality at retail in the local marketplace. This is subtly different and you need to be careful when using an appraisal as a test to see if you got a good deal. Not all local retail stores charge the same rates after all and the selection of the correct marketplace is a big issue in appraising.

 

Lastly, your risk of an appraiser, jeweler or any jewelry professional stealing your diamond is low for reasons that you’ve outlined. A lot of people worry about this but it’s nothing like as common as people think. Your risk of having a car accident on the way to the appraisers office is higher. Most independent appraisers are happy to do their inspection while you wait and while you watch and their report can then be used as a benchmark for future issues. This issue is a reason to get an appraisal, not a reason to avoid one. And drive carefully on the way.

 

With that much money involved, my advice is generally to get it appraised and documented first, before it's mounted. After the piece is completed, get it appraised again to document the finished piece, to match the stone to the first set of paperwork and to inspect for damage by the jeweler setting it (which is far more common than either jewelers or appraisers swapping out stones).

 

Neil

Edited by denverappraiser
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Thanks for your response Neil.

 

You're correct in that I am pursuing a complete appraisal by an independent for the following reasons:

 

1) insurance

2) determine if I'm paying an appropriate price

 

For insurance I'm looking at both options provided from Jewelers Mutual and Chubb Personal Insurance for Jewelry protection. Chubb seems to be more lenient with the appraisal and doesn't require one unless the merchandise is more than $50K. You also have the option of taking a full cash payment or getting it replaced at the dealer of your choice. Jewelers Mutual requires an appraisal for sure and they only have the "replacement of like kind" option. So it's in my best interest to get a complete appraisal done so I receive an exact replacement of the loss ring.

 

You’ve expressed a concern about using the appraisal to decide if you are paying an appropriate price.

I wanted to understand if we have the situation where the independent appraiser valued the loose stone lower than the original price I paid for, could I use that as leverage to have the dealer lower the price and refund me the difference? I obviously will not know the profit margin the dealer expects to make from the sale. The appraisal is going to tell me how much it's going to cost to replace that same from the dealer. Is that the correct understanding? So technically isn't that the current market-value for that stone or is my understanding wrong?

 

I will definitely get an appraisal done before the stone is mounted thanks for that bit of great advice. Subsequently I will also have the full ring appraised as well to determine if there were any damages to it or modifications to the stone afterwards. Hopefully not though, but you never know.

 

 

Bernard

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Whether the jeweler wants to flex their price based on the opinion of an appraiser in order to salvage a possibly lost sale is entirely up to them but, in most cases, they will simply discount the opinion of any appraiser that doesn’t agree with them as disreputable. They are under no obligation to budge an inch. If you’re looking for a lever to use against the jeweler to drive the price down, you’re far better off pulling an offer of a comparable item from one of the competing dealers in the database here and point out that you can get something similar for $xxx cheaper. They can’t always match the Internet prices but they can come close if they try. Even if you have no intention of shopping online, the link at the top of the page titled ‘find online jeweler’ can be a pretty helpful way of crosschecking prices.

 

As a shopping tool, an appraisal will be useful to you in supplying additional information that the dealer can’t or won’t offer and as a double check system to confirm that what they’ve told you is correct. It's also useful as a quality control step for things like damaged stones, inaccurate grading and craftsmanship problems.

 

For a replacement type policy a well crafted appraisal is essential because it’s the definition for ‘like kind and quality’ and for a cash type policy it’s darned useful. Chubb offers to pay up to 50% over the declared value for replacement if you go that route and this puts you right back into the position of using the appraisal as a purchase order. This may not be relevant if you can replace the piece for less than your declared value but if you use your transaction price as the value and the loss doesn’t occur for a few years it’s not at all unusual to find that prices have changed in the interim. Once again, the fact that the insurance company doesn’t require it doesn’t mean that it’s not in your best interest. They are the other side of this deal after all. It’s not the insurer who is being protected, it’s YOU.

 

Neil

Edited by denverappraiser
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Appreciate the input.

 

In this case since the diamond is already GIA certified is it still possible that the stone is inaccurately graded, has craftmanship problems, and/or damaged? I figured GIA certified is the golden standard and since has the toughest guidelines for grading stones I figure if it does have any bad attributes it would be described on the certificate.

 

I just got the GIA Id # so I'll check a few online sites to see whether the price is competitive or not.

 

Thanks again!

 

Bernard

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GIA lab grading is reasonably good evidence that the information provided on the report was correct on the day of examination and on the stone inspected. They deliberately omit a great deal of information, especially with regard to cutting. The cut grade they assign to round brilliants indicates that a stone is in the top twentieth percentile on their scale and they provide effectively no information at all for non-round brilliant cut stones. Many people find this inadequate. Damage done after GIA saw it will obviously not be reported and if the report has been altered or fabricated it obviously wouldn’t apply at all.

 

Craftsmanship issues usually have to do with the manufacture of the mounting, the other stones in the piece and the setting work. Most people are buying a ring, not just a diamond and they devote far more energy to shopping for the diamond than the rest of the piece because of the way the pricing works. By a significant margin when I inspect a new purchase for a client who has devoted a sensible amount of care to their shopping and dealer selection and that ends up going back to the jeweler for whatever reason, it’s almost always because of problems in one of these other areas.

 

Neil

Edited by denverappraiser
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