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1.54 Ct Round Brilliant (Old European Cut) Platinum Engangement Ring - Gia Cert


psulions5023
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I wanted to get a second opinion in terms of whether or not I should get the engagement ring appraised again by a different Certified Gemologist Appraiser. Photos and GIA Grading Report attached for reference. I took the ring to get appraised today and the ring appraised 30% less than what I paid for it. Basically the appraiser told me that since it was an Old Euro cut diamond from the early 1900's (Based on how it was cut and the culet) that it's value is roughly 30% less than a diamond cut with modern technology. Is this true in the diamond market today? I've read articles that diamonds today are being cut to replicate these old Euro Cut diamonds. I am pretty neurotic and thought I did my due diligence prior to purchasing this ring and now feel like I was swindled. I know anything is worth what you are willing to pay for it...I really liked this ring setting and couldn't find anything similar during my countless hours of searching. I plan to propose to my girlfriend of 6 1/2 years in mid-Sept and know she is going to love this ring so the price I paid really doesn't matter I guess. I just am disappointed that the appraisal didn't come close to what I paid for the ring...any thoughts/suggestions would be greatly appreciated!

Regards,
Dan

 

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Uhm. I would disagree with the blanket statement that "an OEC is worth 30% less than a modern cut". It depends on the OEC and it depends on the modern cut; K/SI1 good cut /fair symmetry in a modern cut are 1) very difficult to find and 2) not at all desirable (whereas the fair symmetry and the K colour are far less of an issue in an old stone - and the cut grade is penalised essentially by the symmetry grade).

 

I would also disagree that something with a 34.5° crown angle, 15.5% crown height and a 54% table is an OEC... which is why GIA has called it and graded it as a "modern round", although it isn't one either, but that's more of an academic discussion. More interesting is that proportion-wise, as far as it can be assessed on paper, this could be a very nice diamond if one does not mind what is likely to be an asymmetric pattern.

 

The real issue is what you ended up paying for it... and what you ended up paying for the setting. The price of a "same grade" modern stone is irrelevant - the price of something like this: http://www.diamondsbylauren.com/index.php/jewelry/diamond-ring-181ct-m-vs-old-european-cut-diamond-ring-trade-in-special-r5186 ($10500 as a trade-in special; say 10-15% more if it had been in a new setting) or something like this: http://www.diamondsbylauren.com/index.php/jewelry/loose-diamond-222ct-l-vvs2-old-european-cut-gia-lovely-stone-r5949 are far more relevant - once adjusted for size and setting value.

 

On the mount: we used to make a setting very similar to the one you like; ours was priced at $3995 in platinum, though it may be a bit higher if we were to restart producing it today. Our settings are not cheap - though very well executed - and I'm only mentioning this to give you a reference as to what the setting may be "worth" at retail prices.

 

Why do you feel swindled? Did you ask the appraiser why he came up with a conclusion that was radically different from the price you paid? If the only reason was based on the price of a modern superideal K/SI1, I end up with a particular conclusion on the appraiser, but that may be putting carts before horses.

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Davide, thanks for the quick reply and insightful post! I paid $10,500 for the complete ring; the diamond was already in the platinum setting so I wasn't able to "shop around" for a different center stone. The CGA provided me an insurance appraisal value of $8,000. I just thought that the replacement value should be a little closer to what I actually paid for the ring since I did spend quite a bit of time researching all of this stuff before I made the purchase and thought it was worth something close to what I paid. Then out of left field he stated it was an "OEC" and older stones are less valuable than modern cut stones...so I felt like that's why it ended up where it was with the appraised value...exactly 30% less than what I paid.

Is it worth taking the ring to another CGA for a second opinion on insurance appraisal value? I'd hate to have to actually file a claim through insurance and try to find something comparable for $8,000. Do appraisals usually come in lower than the price most people pay (premium)?

Regards,
Dan


 

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Hi Dan,

 

No, if anything the problem is usually the opposite: appraisers tend to overestimate replacement values because it causes far less trouble for the appraiser if the customer thinks (however misguidedly) that he/she got a bargain.

 

I'm surprised that a CGA comes up with what seem to be rather haphazard blanket statements like "OECs are worth less" (particularly since my everyday retail experience seems to suggest that they aren't, provided we compare like for like).

 

Before you go to the route of requiring a second appraiser's services, go back to your current one, and ask him to justify his value conclusions, including comparables for OEC diamonds or at least other old cuts, not for modern stones from which he deducts a % (and if he can't... ask him where he gets the %, since he doesn't have the comparables from which to calculate it!)

 

FWIW, here is a dozen or so modern (I think - I cannot check them) 1.5x K/SI1/Good cut some of which are very likely cut worse than your diamond, and priced from just below $10k to about $5500. It's also likely that those at the bottom of the price list have naked-eye visible inclusions - does your diamond show anything?

 

http://www.diamondreview.com/diamonds/?sortOrder=price&sortDesc=1&fShape=Rnd&fCaratLo=1.50&fCaratHi=1.60&fColorLo=K&fColorHi=K&fClarityLo=SI1&fClarityHi=SI1&fCutLo=good&fCutHi=good&fDepthLo=50.0&fDepthHi=80.0&fTableLo=40.0&fTableHi=100.0&fSymLo=&fSymHi=poor&fPolLo=&fPolHi=poor&fCulLo=&fCulHi=vlarge&fFlrLo=&fFlrHi=vstrong&fPriceLo=0&fPriceHi=1000000&adv=1

 

Finally, and purely incidentally, even assuming that the diamond is worth 30% less than something else, why is the setting penalised in his assessment to the same tune of 30%?

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As mentioned, that’s not a Euro but Davide has already addressed that issue.  I want to talk about appraising.  There are lots of possible questions that get asked within the confines of an appraisal assignment, and they produce what seems like conflicting answers, but 80-90% of the time the question is the same.  What would it cost to replace this item with another one like it, at retail, new, locally? Is that the question he was answering or was it something else?

Why that definition?  Because that’s generally what your insurance company is funding for, and insurance is the stated purpose of the appraisal.  If you have a loss, they aren’t agreeing to cut you a check (usually), they’re agreeing to replace your lost item with another of ‘like kind and quality’, or words to that affect.  The appraisal serves as what amounts to the purchase order for that replacement.

OK, back to your ring.  What would it cost to replace that with another of like kind and quality, at retail, new, locally?  A good place to start would be the diamond finder utility at the top of the page.  These tend to be discount sellers and they probably aren’t local to you, but they give you a good reality check and it’s easy to look.  There’s plenty of comps and the stone alone is going to run you something like $6-7k.  Add another $2-4k to custom make that mounting and we’re at $8-10k plus tax depending on details not present.  Local stores tend to be more than these guys, occasionally by quite a bit.   They’re very rarely cheaper. Apply whatever premium you think is appropriate.  That’s part of the question for the appraiser.  He knows the local market, he’s seen the goods.  We haven't.  He’s the expert.  We're just strangers on the Internet.  That's why you hired them.   If you think they're wrong, call them up and ask them to defend their value.  Tell 'em what you're thinking and what you're looking at for comps.  They may not agree with you, but they should be willing to explain their thinking.  

Edited by denverappraiser
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Thanks for the quick replies guys! I am going to reach out to him today since he appraised the ring yesterday. I stopped by to pick the appraisal report up after work and he left for the day before I got to question anything. Does anything stick out on the report that would make you believe it's only worth $8k to replace? I live in NJ and things are far from cheap here...I guess you can never perform enough due diligence when it comes to purchasing something. After I hear back from you guys I will give him a call and provide you his thoughts as to how he came up with an $8k insurance replacement value.

Regards,
Dan

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Edited by psulions5023
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There is nothing swinging things one way or the other, apart from the fact that both Neil's and my gut instinct seem to disagree with the appraiser's evaluation... but if this is all there is as far as a description goes I find the report quite seriously at fault.

 

It doesn't mention the centre stone is round (though it would be apparent to anyone who knows a little about diamonds) doesn't give even an approximate weight for the whole ring, and most importantly it doesn't mention the main stone is an old cut - which:

 

1. To me (if perhaps not to you) would be the key reason for wanting that ring

2. To him (the appraiser) is apparently a significant feature in driving the price down

3. To anybody looking for a replacement means getting something that is very unlikely to look like the original...

 

ETA: and, as Neil explained above, the value conclusion should specify "value for whom, in what market and place"... - though to be fair it may be on the first page of the appraisal.

Edited by davidelevi
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FWIW, he doesn't call it a Euro.  He doesn't even call it round. 

 

That description is seriously lacking. You would be hard pressed to replace it based on that if there were a loss.  Some of that comes from the photos but it's missing fundamental items like the weight of the item, size, manufacturer (if known) and others.  

 

 

ETA:  Davide beat me to it with a very similar comment.  

Edited by denverappraiser
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Thanks guys! Obviously I'm a newbie to this but I'm not an idiot...I had to get some opinions since I thought the report was lacking myself, regardless of what he valued the replacement cost at. I just snipped a portion of the complete report. It does reference the GIA Cert number so I'm assuming he is going to say that would be what they would look at to find a comp for the center stone. There is a page in the appraisal with a photo of the ring next to his business card.  

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Yes, but...

 

1. The GIA report makes no reference to the ring (obviously)

2. The GIA report makes no reference to the cut being old - which makes a difference as explained above - even though there are clues (lower girdle length, culet, symmetry, out-of-roundness), none is firm evidence.

3. Even if the GIA report contained all the relevant information (which it does not), I would still expect the appraiser to extract the relevant parts (of which "round brilliant" is one). Otherwise you could simply use the GIA report and a copy of your invoice for all purposes...

 

ETA: I'm not trying to be patronising; I'm trying to help by anticipating the way the discussion could go with the appraiser and giving you some possible replies. If you think this isn't constructive, I'll stop! :)

Edited by davidelevi
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I called and didn't really get very far. He did research comps to get to his valuation of $8k...I didn't tell him how much I paid for the ring when I initially went in because I wanted to get a true valuation from him. He is the CGA, I am not...I trust his word. Maybe that was my mistake or maybe I should have had the ring appraised before I purchased it (my thoughts, not his). He did call GIA to discuss how they arrived at the Round Brilliant classification rather than OEC on the GIA Cert Report. They told him the diamond didn't meet the criteria to be classified as such (I believe it was 3 out of 4 criteria needed to apply to be classified Old Euro Brilliant). He said in all honestly he would have paid $9k for it personally, $10.5k seemed a bit high for him. He went into talking about how jewelry stores have sales where they mark down jewelry so I may have purchased at an inflated cost unfortunately. I didn't go to a brick and mortar store...I went to a booth in the diamond district in Manhattan. I did my research and from my valuation (not a CGA) believed the ring was worth what I paid.

In terms of insuring the ring...he said to find an insurance company that offers to provide you the appraisal amount in the form of a check...not replace the ring with a "similar" ring. This would enable me to shop around for a new ring and not be stuck getting something with similar/like qualities, but not in fact what I want.

He said I could always contact the place I purchased it from and disclose the appraisal info and maybe something could be worked out (I find that highly doubtful). I already paid them, it's past the time of their return policy...they are going to tell me to go pound salt. Maybe it's worth getting a second insurance appraisal done to see if he was just pretty conservative in terms of the insurance replacement value? This area is so subjective...it's going to give me an aneurysm. :blink:  
 




 

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To be sure he’s under no obligation to agree with you but there are a couple of zingers in there.
 

He would PAY $9k for it but he estimates the cost for someone to custom make one like it is $8k?  Huh?

 

There ARE no such insurance companies, at least not out here in Colorado.  Chubb will do it, but they don’t write policies for under $50,000 (and even that needs to be coupled with your houses, cars airplanes and so on).  Does he have a specific recommendation for an insurance company that would do this?  These things vary by state and NJ may be different.

 

Can he show you those comps, if only for your own educational purposes?

I’ve got no love for the GIA rules on Euros and it’s a good sign that he checked.  He called it what they called it, which is the right thing since he’s referencing directly to their report.  I’ve got no problems here.

 

You’re right, I can’t imagine your seller being very cooperative.

 

I’m not impressed with that appraisal anyway, if only for the description problems discussed above.  You didn’t mention if the photos are any good but I don’t think it’s going to meet your insurance needs anyway.  Unfortunately, I think you need better documentation anyway and if he won’t fix it, I would go to a different appraiser.  Try to find one who is running an appraisal practice, not a jewelry store doing it as a sideline. 

 

By the way, did the seller provide you with anything for this purpose?

Edited by denverappraiser
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Yea, zingers alright...you can only beat a dead horse so many times. He recommended State Farm in the town his store was in...assuming his business insurance is through them and gets a kick-back for pushing their services.

 

I have been doing some research online and have come across a forum stating that someone was able to just insure their engagement ring through Chubb...and they offer the cash payout option. I also read that this person was able to insure the ring using the declared value as well...maybe that is something I could look into. Keep the insurance appraisal report for documentation but go ahead and try to use my ring invoice for insurance purposes...or provide both to them and just ask to insure it for the declared value since the appraised value was less than the declared value.
 

I knew this process wasn't going to be an easy one...but thankfully I found some solace in both your posts as well as Davide's. Thanks again for the help!


 

Edited by psulions5023
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For insurance purposes, I would keep any expert report mentioning a lower number than you paid well away from the underwriter's eyes; it only stirs up trouble.

 

If you really don't want to fork out another $100 (Neil charges less, BTW, but by the time you've paid return shipping... it's more), try insuring based on your receipt/invoice and the GIA report, and/or ask the vendor if they would write a descriptive bill of sale (we do, by default, and most insurance companies are pretty happy with that).

 

(BTW - from what I read, State Farm are a pretty good domestic insurer; I'm not sure that the appraiser's recommendation is quite as biased as you think).

 

Personally, I would find another appraiser - not just "a CGA" but someone who does appraisals and only that for a living - if nothing else because of the health implications for your cerebrum (not to mention the liver).

 

(Third zinger, with apologies to the dead horse: if you had to go downtown Manhattan to find it - where incidentally "a booth in the Diamond District" is as brick & mortar as it gets - and he didn't show you locally purchasable comparables he has not in any way substantiated his research or his claim that "locally it would be cheaper, or it could be on sale" other than in generalisations. It's a bit like arguing that a Lamborghini Huracán would be cheaper in Beulah, ND because rents are cheaper there, and the dealer would be running discounts because very few people want a Lamborghini in North Dakota; shame that the nearest dealer is in Denver, over 600 miles away)

Edited by davidelevi
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At least around here, State Farm doesn't write declared value policies at all.  Chubb will do it but, as mentioned above, they've got a minimum that's way above your price point and most agents won't even do that unless you've got other business with them.  That said it never hurts to ask.  Google up a local Chubb agent and give them a call.  They're an extremely friendly company and if you don't choke on the rates and they're willing to take your busines, I highly recommend them.   No, I don't get a kickback.  :)

 

State Farm is also a pretty good company. Last I checked, they won't write a stand-alone jewelry policy.  As far as I know, it has to be paired with a homeowners or renters policy.  They don't pay kickbacks either (insurance is highly regulated in the US and that would be illegal unless your jeweler has both an insurance license and a deal with them).   

Edited by denverappraiser
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As opposed to Davide, I'm always a bit weary of giving the insurance company a bill of sale as proof of value.  The insurance company should be insuring at an amount sufficient to replace with like kind at a normal (brick-and-mortar) retail store.  The fact that the client may have purchased it at a discounted price or won it in a poker game does not change the fact that it is insurable at a retail price.  For all the reasons mentioned above, I would seek out another professional, independent appraiser.  One who is not affiliated in any way with any jewelry store or trades in any way.  If you are local to NYC, there are a couple such outfits right in midtown.  If you are not, tell us where you are and we may be able to direct you to someone more convenient.

Edited by GeorgeDI
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I'm going to go ahead and insure the ring right now through State Farm ($109/yr) for a policy with $0 deductible for the $8k retail replacement value appraisal amount. I am going to try and find another appraiser to get a second opinion sometime next week. I still have some time before I pop the question but at least I'll have some peace of mind that the ring is covered for most of the declared value in the event someone burns my apartment complex down while I'm at work  ;) If they appraise the ring for more than $8k I will talk to my agent and see if they can modify the policy based on the new appraised value.

 

George, I'm in Rutherford...a 30 minute bus ride into Port Authority.

  

Edited by psulions5023
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State Farm is working on a jewelry only policy for me. I caught the guy on the phone before he was leaving for the day and told me he would send me the documents to review tomorrow. He calculated quickly how much the premium would be based on the appraisal value. Is the rider on the homeowners policy more favorable? We live in an apartment and my gf currently has the renters insurance set up through Travelers I believe. It would probably make sense to roll that over to State Farm when the policy expires to get some kind of multi-policy discount I would imagine.

 

You guys rock (no pun intended) with the responses! I didn't think it would be this easy to get so much helpful information on the internet. Definitely an asset to your industry. Wish I found you guys before I bought this ring to bounce some ideas off of then I wouldn't be in the pickle I'm in right now.  

 

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I specifically asked that question and he said it was a replacement policy. I will be sure to read the fine print when he sends the policy documents. I sent him the info he needed to set up the policy tonight and also sent him additional pictures to document the ring since the appraisal report photo doesn't show the milgrain design on the setting which is half the reason why I purchased the ring. I also sent him the invoice from my purchase of the ring hoping he will let me increase the policy amount to $10,500 (obviously with a greater premium). Hopefully they are willing to work with me on that. I will let you know what happens after I talk to him tomorrow.

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Update: State Farm increased my limit of liability to $10,500, closer to the retail replacement value of the ring in my eyes, not $8,000. I'm happy they were able to do this. This is a jewelry only policy.

 

As for reaching out to the seller...he was shocked. I expressed that I was upset and sent him the full insurance appraisal. He offered to give me a full refund if I chose to do so. I expressed how much I like the ring and had no intention to return it. He thinks it would be best to take it to get reappraised somewhere that specializes in vintage jewelry, which I plan to do for peace of mind...below is part of his email response to me.

 

"As for the appraisal, I really do not understand how it could appraise so low when the price per carat on a GIA certified diamond according to the Rapaport list would make the diamond alone worth $8,778 at list price to be exact, that is list price and just for the diamond and does not include the setting. As you may be aware, an appraisal is supposed to represent a retail replacement value, that would be approximately 30% over list price including the setting. Perhaps the appraiser is not familiar with this type of ring or jewelry or with European cut diamonds. It just does not make sense to me."

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Congratulations on a successful purchase and, specifically, kudos to the seller for standing behind his sale, even after the expiration of his return policy, and even in the face of what frankly looks like a BS problem.  He went over backwards for you.  

It would be a nice gesture to start a new thread with his name in the title and say nice things for the benefit of future customers.  Google will take it from there.  Ground floor in the diamond district is a pool of sharks and it sounds like you found a good one. 

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Yea my blood pressure has returned to normal. Thanks for making yourself available to answer the questions that I had, I really do appreciate it. I will start a new thread for sure. Should it be in "The Rock" category? I will also make a new thread for yourself if there isn't already one...if there already is one I will be sure to add to it.

 

He also told me that if I need an "appraisal like" document, which is good for insurance purposes only, he could provide me with one on their letterhead and it would state the retail replacement value which would be at the 12k to 13k price he had originally told me. Would the insurance company accept that do you think? Would I be over-insuring the ring in your opinion? Thanks again for all your help!

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