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Advice Needed: Too Good To Be True?


jtatur
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Hi All - awesome forum, I've enjoyed reading responses to various posts, but now have a question of my own:

 

I am considering buying a loose diamond with the following specs:

  • Round brilliant cut
  • 4.01 ct
  • K VS2
  • 9.6mm wide
  • Good cut
  • Natural, untreated stone
  • GIA certified

The price is £11,500 excl VAT($18,400), which based on all of my research is significantly below wholesale prices.

 

What's the catch? What should I be looking out for?

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What's the cert number?

 

Is this a dealer or a private party?

 

The catch is probably in that 'good' cut. It's not a simple scale and that's rather near the bottom. It may also be in the 'GIA'. Sometimes people mean something other than GIA Gem trade laboratory (www.gia.edu) and try to pass off grading by a GIA graduate or by the Galactic Investment Advisors.

 

'Wholesale' in the diamond business is a seriously loaded term. May I ask what you mean by that? Mind you, I'm not disagreeing that the price seems to be unreasonably low and that you're right to be looking for the whammy but be careful how you decide what's comparable.

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To me, buying a 4 ct diamond with a Good Cut is somewhat like buying a Hummer with a Hyundai engine. You're getting the size but you're risking performance. It's hard to say anything with certainty without seeing the diamond, but, even though with a VS2 inclusions probably will not affect performance, the Good Cut may. If it's too shallow, too deep, whatever it may be...you may be "leaking" light somewhere. When budget is an issue I generally recommend going with VS2 or higher and at least a Very Good cut. If you want to save some more, you can try an SI1/SI2, but then it's a good idea to have a trusted appraiser examine the diamond to make sure that it is eye clean, that there are no durability risks, etc... (although it's a good idea to have a trusted appraiser examine ANYTHING you're buying).

 

And finally, with a K you're probably seeing a faint yellow. Is this intentional? If you prefer clear, consider going with a J or above.

Edited by Encore DT
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It's still a wierd deal. A terrible cut K/VS2 4 carat would probably bring quite a bit more than we're talking about for any decently connected dealer, even if just as a recut candidate. If this is a dealer, and it's in inventory then there's more to this story than we know. The issue is what the deal is and whether or not it's acceptable.

 

Recutting is not a job for amateurs but it IS out there. If it's ugly, that's a deal killer to be sure but we don't even know that. WHY is it only 'good'?

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Many, many thanks again for your valuable input. This is a fantastic forum, thanks largely to your extensive expertise!

 

Now, a bit more background. This is a dealer based in London’s Hatton Garden. We have purchased from him before and everything has always checked out when appraised. We suspect the discount is due to: (a) tax evasion, and/or (
B)
other ethical issues, e.g. not subject to Kimberley Process, potentially stolen, etc. Alternatively, the discount is solely due to the fact that the cut is only good, and the dealer needs to make a sale. This price followed long negotiations. Note: We would be paying cash.

 

So our follow-up questions are as follows:

1. What are the best conditions to “test†cut (without any special equipment)? Comparing different diamonds against a black background? Seeing the diamond in the natural light?

2. How discounted is £11,500 ($18,400) on a diamond with these characteristics, in this situation? What price would you expect in these circumstances? Could the discount be due to tax and or ethical issues?

 

Again, hats off to you all! We’re greatly appreciative…
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There are dozens of comps from the dealers here in the database. The CHEAPEST is asking triple that price. They probably have to actually buy their stuff and that drives up prices. :unsure:

 

http://www.solomonbrothers.com/DiamondDetail.aspx?sku=4H997Y35&affiliate=06d43b62-5aab-4d17-a405-7518f29ba9ee&SE=DiamondReview

 

 

There’s more to this story. The theory that the seller is a criminal is an interesting one but it makes me wonder…. If that's the case, why are you confident that the victim is going to be someone else? He’s going to cheat the other guy and pass the savings on to you?

Edited by denverappraiser
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I'm with denverappraiser on this one...the whole deal doesn't sound right. Theoretically speaking, if you're dealing with a "criminal", then he could even be using the report on a different stone and presenting it to you with this one, hoping that you will not tell the difference. There are a million ways this deal could go wrong, and the fact that he is making you pay cash is not making matters any better.

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