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Some Tricky Questions On Appraising / Selling Diamonds


LydiaYing
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Hello everyone

 

With the economy in pretty bad shape, I've decided to sell some of my loose diamonds.

 

First, I would need to get it appraised at an independent appraiser but I have never done this before so I have some questions

 

 

1)

I'm unable to locate my original certificate for my diamonds.

Will this be a problem when I get my diamonds appraised?

 

 

2)

Will the appraiser engrave an identification number on my diamond so it matches with the grading document that the appraiser issues me?

 

If the appraiser does not engrave an identification number, then how can the buyer believe that the diamond I'm selling is the diamond on the grading document?

 

 

3)

Once my diamonds are appraised, where is the best place to sell it to get the best prices?

 

 

Is there anything else I should know before I head out to appraise my diamonds?

 

I'm new to selling valuables and I feel like I'm venturing into uncharted territory. Any tips and advice would be greatly appreciated

 

Thank you for your time.

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Hi Lydia,

 

Welcome to the forum.

 

Not so tricky. These are common and important concerns for private sellers.

 

There are two primary objectives for individual sellers seeking appraisal services. First is to find out what they have and to assist in plotting a path for resale. This basically leads to the questions you have listed here. The second is to provide an advertisement to the buyer to help establish credibility for what you’re selling. This seems to be what you're assuming an appraisal is for. Although both fall into the realm of appraising, these are decidedly different issues. You may need both, you may not need either. It will depend on your strategy.

 

Let me ask you a few questions to start:

 

You mentioned that you have several loose diamonds. How many? What sizes? What price point are you expecting (the strategy for selling $100,000 things is not the same as the strategy for selling $500 things)? How did you come by this expectation?

 

What do you already know about what you have and where did you get this information?

 

Where are you?

 

Where and when did you get the stone(s)? Assuming it’s a dealer, are they still in business?

 

Is speed going to be an important topic or are you willing to go a little slower if it produces more money?

 

I’ll write some more later based on your answers to the above.

 

Neil

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Thanks for the reply DenverAppraiser :)

 

Let me answer your questions

 

 

- They are 4 Loose diamonds approximately around $300 each

 

- They were handed down to me, along with other possessions, by a relative a long time ago and not purchased in a store. That is why I do not have the papers or much information. I just recently decided to start selling them due to my financial and the economic situation

 

- I live in Ohio

 

- Speed isn't particularly THAT important

 

 

I look forward to your reply ;)

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Selling diamonds as a consumer is difficult, and undocumented diamonds are doubly so. It probably would be worth your money to get an appraisal, just so that you know what you have and so you have an idea how to proceed. The problem is that an appraisal of this sort isn’t likely to be very useful to you as an advertisement so it only solves half of your problem to get them appraised. How to proceed from there to sell them will depend on the answer to the first part.

 

The usual choices are ebay/craigslist, sale to dealers, consignment sales through dealers, and simply keeping them and making something for yourself or a loved one. They all have their features and problems.

 

Make sure the appraiser understands the question you are asking. There are several different types of appraisals and they are quite different from one another. The correct answer to the wrong question is doing you no good.

 

Some good places to look for an appraiser are:

 

www.najaappraisers.com

www.appraisers.org

www.americangemsociety.org

www.americangemregistry.com

 

Neil

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I’m not trying to be evasive here. The problem is that most people have a seriously inflated opinion of what their things are likely to be worth on resale. They get this way because some jeweler told them a number and they believed them. They’re experts after all. Unfortunately, any statement of value must have an element of what it’s worth to whom, when, and under what circumstances or it’s not useful information. If you go into most jewelry stores with a diamond and ask them what it’s ‘worth’, what they’re going to tell you is what they would be charging for it before they offer their usual discounts. That is to say, about double what they would charge. What they charge is, of course, more than what they pay and what they pay their regular suppliers is more than what they would pay YOU for a variety of reasons and the result is some serious misunderstanding about what things are ‘worth’. When you weren’t either side of this conversation and you don’t even know who was involved, it gets even worse. $300 might mean $50 and it would surely annoy you to pay an appraiser $45/stone to tell you this (this is what I would generally charge although I would give a discount for 4 stones on the same report). On the other hand, it might mean $1000 and what happened is some shyster wanted to buy them from her for $300 so she decided to give them to you instead. The difference is pretty important.

 

Neil

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Thank you for the links Neil

 

What sort of appraisal am I looking for here? Not insurance appraisal....

 

Any I really would appreciate some quick answers to my first set of generic questions. I feel the only one that hasn't been touched upon is #2

 

 

I’m not trying to be evasive here. The problem is that most people have a seriously inflated opinion of what their things are likely to be worth on resale. They get this way because some jeweler told them a number and they believed them. They’re experts after all. Unfortunately, any statement of value must have an element of what it’s worth to whom, when, and under what circumstances or it’s not useful information. If you go into most jewelry stores with a diamond and ask them what it’s ‘worth’, what they’re going to tell you is what they would be charging for it before they offer their usual discounts.

 

That's why I'm going to an independent diamond appraiser that is a member of the American Gem Society

 

 

Thanks again ;)

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2)

Will the appraiser engrave an identification number on my diamond so it matches with the grading document that the appraiser issues me?

 

If the appraiser does not engrave an identification number, then how can the buyer believe that the diamond I'm selling is the diamond on the grading document?

Most appraisers do not have the necessary equipment to do girdle inscriptions but it’s easy enough to job it out if you want it. The major labs all do it quickly and for reasonable prices. It’s a very unusual request in this situation. Recognizing a specific stone is done with the plotting diagram or the photographs.

 

How buyers protect themselves is a different issue. They’re generally wise not to believe any of the paperwork you provide anyway, whether or not there is a girdle inscriptoin. It’s just too easy for unknown sellers to alter or outright fabricate things. How they protect themselves is to hire their own appraiser to represent their own interests (unless they are experts themselves and they want to rely on their own tools and skills).

 

Just be straight with the appraiser and tell them what you want to learn from the appraisal session. ex: "I have inherited these diamonds that I would like to sell and I want advice on choosing a marketplace and selling strategy as well as an idea of what I can reasonably expect to realize from the sale."

 

Neil

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Although Neil has given some great advice, I have a slightly different point of view.

If the diamonds cost $300 each, it's highly unlikely they are worth a lot today- unless they were purchased many many years ago ( like 80+).

Therefore, I'd say to take them to a jewelry store and get an informal opinion.

Don't take any action based on the advice- but let us know what you find out.

 

Questions to ask: How large are the diamonds? What shape are the diamonds?

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David,

 

We don't know whether they cost $300, whether someone offered her $300 for them, whether they 'appraised' for $300 or any of a variety of other sources for this information. As I said, the difference is pretty important. There's an awful lot of jewelry store workers that really don't know diddly and just choosing one to ask because their advice is free doesn't really improve the situation much. This is a case where an informed professional opinion is far better than a free guess.

 

Neil

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But Neil, a "free guess" might give us enough info to assess if it's worthwhile to spend money with an appraiser.

If, for example, we find out these are .25ct diamonds- it's not really worth the time of money to go to an appraiser.

If they are one carat diamonds, that's a totally different story.......

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A guess is only as good as the person making the guess and employment at a jewelry store is NOT a good basis. Any appraiser that's worth their salt would report that and decline the job up front during the course of the client interview about what she's trying to learn. There ARE capable appraisers for this kind of job who work in jewelry stores and most AGS dealers have one.

 

Neil

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As a consumer, I would imagine (expect is perhaps too big a word) that any appraiser that is worth his/her salt would warn me upfront if the item is almost certainly worth less than the appraisal fees. And equally I would imagine that any decent person would thank the appraiser and offer him/her fair compensation for his/her time and expertise - which should be substantially less than the full appraisal fees.

 

Or is that an unreasonable thought?

 

Of course, there is always a grey zone where the item is valued "something more" than the fees, but not "enough" to make the client feel the fees were worth it, but that's another matter entirely.

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There are situations where I’ll do an appraisal with a value conclusion less than the fees, like when the item is fake and they need the report to do battle with the dealer or for certain tax type matters but, in general, it’s pretty easy to tell in advance when a client is likely to be severely disappointed with the service.

 

The very first step in every appraisal assignment is to talk to the client about the purpose of the assignment. The appraiser then must decide if they are going to accept the job at all. Obviously, if they decline the job then there should be no fee. An appraiser can decline a job for a variety of reasons ranging from their inability to do the required work to difficulties in working out a price, schedule or whatever. Both sides can walk away at this point and, in my opinion, most appraisers don’t turn down nearly enough work. One of the best reasons I can think of for an appraiser to decline a job is if they can anticipate that the results will be an unhappy client who feels cheated (by the appraiser that is, it’s an entirely different thing if they were cheated by someone else and the appraiser is just reporting about it). If nothing else, that’s just bad marketing.

 

Neil

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