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4.7 Carat Diamond.


shepa
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First big question for me is: "Who are EDR, and why should you trust what they say?" I have never heard of them; have you?

 

In any case, assuming they are grading the stone correctly, would you want a light grey I1 with a 71.4% depth and 22% crown? Regardless of any "value" arguments, I'd pass.

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This is a pretty common general question.  The short answer is that we have no clue.  Really.  The longer answer, and a fundamental problem in the diamond business is WHY we have no clue.  I'm guessing this is an offer for sale and the dealer is acting like they're telling you EVERYTHING while we're telling you that you don't know diddly.  Why the difference?
 

Anyone who wants to can call themselves a gem lab, jeweler, gemologist, appraiser, wholesaler or just about anything else.  They are welcome to whatever opinions they happen to have and they can even write them in a report.  This doesn’t make it so.  Like the above, I’ve never heard of EDR, which doesn’t make them wrong, but it sure doesn’t make them right.  The implication here is that the stone is somehow ‘certified’ as having certain characteristics, and that those characteristics result in a certain ‘value’.  Both are false and the combination can lead to some catastrophic misunderstandings.

 

Let’s start with the whole certification business.  What we KNOW is that some seller presented a document with some data on it.  That’s it.  What we don’t know is if anyone else will agree with that data or, for that matter, if it’s even the same stone.  Again, I’m not saying EDR is wrong, I’m saying that you’re relying 100% on the word of the seller who is asking you to rely 100% on them.  Both are total unknowns. 
 

Then there’s the question of value.  The most common appraisal question is to estimate a price and provide documentation to replace a particular item with another one of like kind and quality, new, at retail, locally.  That’s the definition because that’s what insurance companies want, that they want that because that’s what they’re agreeing to do in the case of a loss (theoretically).  Marketplaces matter and even ignoring the above fuzzy issues on quality, that’s almost certainly NOT the market being discussed.  Yes, it matters.  If a seller says it’s a bargain because it would be expensive to custom make a replacement in Aspen, what have you learned?  They may even be right.  So?  If you live in Aspen and are shopping for a replacement for something it may be relevant but maybe not even then.  In that scenario you would be far better off simply asking jewelers what THEY would be charging to supply one.  That’s not an appraisal, it’s a bid.  This does not translate to evidence of a bargain elsewhere, say a discount website that will FedEx it to you.  It’s a false question.  The price of a 10 year old BMW at the buy-here-pay-here car lot in Denver is not a function of what a new one costs at a dealership in Kuwait, even if the dealer gives you a laminated report pointing out that Beemers are quite expensive there.  That report isn't just worth nothing, it’s worth less than nothing because it serves as a distraction to the real question.  Put another way, you’ve learned nothing at all about the car (or the diamond), but you’ve learned something about the dealer.  They’re deliberately trying to mislead you.

Edited by denverappraiser
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