Appraised value vs Purchase Price
- Thread starter nflor001
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IceExplorer
Shiny_Rock
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Often it's even more different than that. With most appraisals, the definition of value being used is something on the order of 'what is the highest price it could be expected to cost to replace this item with another of like kind and quality at an unspecified local specialty jewelry store'. The purchase price, on the other hand, is something like 'what is the highest price that this particular store can actually get for it?', and the value that customers often REALLY want to know is 'what is the lowest price I can reasonably expect to pay for one like this?' or 'how much can I expect to realize on resale?'. These are wildly different questions. The difference between these and the numerous other possibilities has to do with the marketplace, not the gemology but they can easilly result in differences of 200% - 1000%. When you get it appraised, make sure the appraise understands what question you're asking. Even the correct answer to the wrong question is doing you no favors.
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The white diamonds I have bought from PS vendors came with "appraisals" claiming it's value is 30 or 40% MORE THAN I JUST PAID THEM!!!
That says it all.
So much for "appraised" value.
I think anyone with a brain would be annoyed by these vendor-provided "appraisals".
People without a brain will be fooled and delighted that they got such a steal.
Plus, unlike with gold we must pay retail for diamonds but if we must sell them we only get wholesale which is much much less.
Once again, so much for "appraised" value.
That says it all.
So much for "appraised" value.
I think anyone with a brain would be annoyed by these vendor-provided "appraisals".
People without a brain will be fooled and delighted that they got such a steal.
Plus, unlike with gold we must pay retail for diamonds but if we must sell them we only get wholesale which is much much less.
Once again, so much for "appraised" value.
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A great discussion- I think appraisal values are used in horrible ways by deceptive sellers.
I frequently see sellers advertising items with wild appraisal values, and no explanation. "Buy this ring for $200 which appraises at $50,000,000"
This is a clear indication- to me- that the seller is very willing to bend the truth- a red flag, as it were.
Therefore, using appraisal values as part of a sales pitch is bad news.
In the case of purchases, I think it's incumbent on a vendor to
a) provide a document detailing the purchase, which should be suitable for insurance, or identification.
We do call it "an appraisal" to avoid confusion- however it's really different than a document Neil would provide as a third party.
b) discuss the method of evaluation with the buyer.
For example: If someone bought a stone from an internet vendor for $5000, it's possible that a similar stone, if found in a high line boutique could fetch $7500- or more.
If the buyer wants the higher value, and it's properly explained, that seems fine to me.
I always remind buyers , in such a case, that they will pay insurance at the claimed value, but in the event of a loss, their insurance company is not going to cut them a check.
Plus, if they bought the item once from an aggressively priced internet seller, they would likely replace it the same way, if need be.
If a buyer takes the item for a third party appraisal, I believe the above issues should be discussed. As opposed to simply providing a value with no explanation.
I frequently see sellers advertising items with wild appraisal values, and no explanation. "Buy this ring for $200 which appraises at $50,000,000"
This is a clear indication- to me- that the seller is very willing to bend the truth- a red flag, as it were.
Therefore, using appraisal values as part of a sales pitch is bad news.
In the case of purchases, I think it's incumbent on a vendor to
a) provide a document detailing the purchase, which should be suitable for insurance, or identification.
We do call it "an appraisal" to avoid confusion- however it's really different than a document Neil would provide as a third party.
b) discuss the method of evaluation with the buyer.
For example: If someone bought a stone from an internet vendor for $5000, it's possible that a similar stone, if found in a high line boutique could fetch $7500- or more.
If the buyer wants the higher value, and it's properly explained, that seems fine to me.
I always remind buyers , in such a case, that they will pay insurance at the claimed value, but in the event of a loss, their insurance company is not going to cut them a check.
Plus, if they bought the item once from an aggressively priced internet seller, they would likely replace it the same way, if need be.
If a buyer takes the item for a third party appraisal, I believe the above issues should be discussed. As opposed to simply providing a value with no explanation.
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Not surprisingly, I’ a big fan of quality appraisal services and I think they can be extremely useful for clients. I do it for a living and I’m proud of what I do. That said, there are a ton of abuses out there under the moniker of appraisal services, some coming from dealers, some coming from appraisers and some coming from the clients themselves.
There are appraisals, and appraisals have value conclusions, but ANY statement of value must contain an element of what it’s worth to whom, when and under what circumstances or it’s of no use whatever. For some reason people want to ignore this fundamentally obvious statement and jump straight to the value conclusion as if it stands alone in isolation or as if it were a matter of simple arithmetic to convert from one marketplace or set of circumstances to another. They want to use one set of conditions, for example the cost to hire a designer to custom make a piece of certain specs, as evidence of a bargain when someone else is selling something of those specs for less money. Maybe it is and maybe it’s not, but this isn’t evidence either way. Steaks are cheaper at Denny’s than a steak of the same description at Morton’s. It's cheaper still at the grocery and even less at the feedlot. So what? That doesn’t make Morton’s a ripoff and it doesn’t make Denny’s a bargain. Resale value is zero in both of these cases by the way. There are a lot of untrained appraisers who write reports answering the wrong question and there are a lot of clients who don’t know enough about the process to ask what they really want to know. One of the hallmarks of a professional appraiser, whether it’s about diamonds, real estate or business equipment is that the FIRST thing that will happen is an interview with the client laying out exactly what the objectives are and exactly what the appraisal is and is not useful for. If this didn’t happen, and the details about the assumptions made aren’t included in the report, IGNORE IT IN IT’S ENTIRITY. If they are there and you did have this conversation, read what it says make sure they are relevant to what you’re trying to learn. Without it you have learned NOTHING, and possibly less.
There is no such thing as an appraised value.
There are appraisals, and appraisals have value conclusions, but ANY statement of value must contain an element of what it’s worth to whom, when and under what circumstances or it’s of no use whatever. For some reason people want to ignore this fundamentally obvious statement and jump straight to the value conclusion as if it stands alone in isolation or as if it were a matter of simple arithmetic to convert from one marketplace or set of circumstances to another. They want to use one set of conditions, for example the cost to hire a designer to custom make a piece of certain specs, as evidence of a bargain when someone else is selling something of those specs for less money. Maybe it is and maybe it’s not, but this isn’t evidence either way. Steaks are cheaper at Denny’s than a steak of the same description at Morton’s. It's cheaper still at the grocery and even less at the feedlot. So what? That doesn’t make Morton’s a ripoff and it doesn’t make Denny’s a bargain. Resale value is zero in both of these cases by the way. There are a lot of untrained appraisers who write reports answering the wrong question and there are a lot of clients who don’t know enough about the process to ask what they really want to know. One of the hallmarks of a professional appraiser, whether it’s about diamonds, real estate or business equipment is that the FIRST thing that will happen is an interview with the client laying out exactly what the objectives are and exactly what the appraisal is and is not useful for. If this didn’t happen, and the details about the assumptions made aren’t included in the report, IGNORE IT IN IT’S ENTIRITY. If they are there and you did have this conversation, read what it says make sure they are relevant to what you’re trying to learn. Without it you have learned NOTHING, and possibly less.
TheDoctor
Shiny_Rock
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Appraisals are annoying. They are subjective. The true "value" has more to do with the marketplace than any other factor. Could the item be bought for the same price tomorrow, or in a year?
In most cases, NOBODY pays the appriased price. They are are full of themselves for paying half.
In reality, "half" has allowed all of those involved in the production and marketing a decent day's wage.
"Suggested retail" and "REGULAR PRICE" generally can be regarded as a misrepresentaion of what the item might sell for.
It sells for what you and eight million others will shell out for it. That's the "regular price." Not disclosed.
This whole 50 percent off thing has gone to the point of...look, what's a fair price? if you're willing to pay, that's the fair price.
if you were to insure the item, most likely you could replace it in 6 months at the same price.
If you're paying an insurance premium based on some kind of bull$h!t appraisal number, you could be paying twice what you should.
If you are a potential purchaser, avoid the consideration of appraised value presented by the seller. It is nothing but pure deception.
In most cases, NOBODY pays the appriased price. They are are full of themselves for paying half.
In reality, "half" has allowed all of those involved in the production and marketing a decent day's wage.
"Suggested retail" and "REGULAR PRICE" generally can be regarded as a misrepresentaion of what the item might sell for.
It sells for what you and eight million others will shell out for it. That's the "regular price." Not disclosed.
This whole 50 percent off thing has gone to the point of...look, what's a fair price? if you're willing to pay, that's the fair price.
if you were to insure the item, most likely you could replace it in 6 months at the same price.
If you're paying an insurance premium based on some kind of bull$h!t appraisal number, you could be paying twice what you should.
If you are a potential purchaser, avoid the consideration of appraised value presented by the seller. It is nothing but pure deception.
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- Mar 24, 2005
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- 1,529
I tell my clients to focus on the "quality" of the information provided in the appraisal document.
Insurance appraisals should be detail oriented. At the conclusion of my analysis, I have a discussion with my client on proper valuation and my methods for determining the value.
I've noticed more and more that consumers are more concerned with a complete and accurate description of their item rather than the age old question "did I get a good deal?"
The internet and consumer sites such as PS has put the focus back on quality instead of pure price.
There will always be the consumer who is lured by fictitious discounts and stores claiming that an item will guarantee to appraise for double....which has zero credibility and is meaningless.
Insurance appraisals should be detail oriented. At the conclusion of my analysis, I have a discussion with my client on proper valuation and my methods for determining the value.
I've noticed more and more that consumers are more concerned with a complete and accurate description of their item rather than the age old question "did I get a good deal?"
The internet and consumer sites such as PS has put the focus back on quality instead of pure price.
There will always be the consumer who is lured by fictitious discounts and stores claiming that an item will guarantee to appraise for double....which has zero credibility and is meaningless.
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- Jun 6, 2010
- Messages
- 6,880
Appraisals are very misleading. I discovered this when I lost my original wedding set and filed a claim with our insurance company. We had been paying premiums for 10 years based on the appraisal we had submitted (at the time, I didn't realize that the appraisal was more than DH had paid for the rings)....of course, we got a whole lot less than the appraised value. I called the insurance company to complain about this and request a refund for the difference between the premiums we had paid based on the appraised amount and the check we'd received (I didn't expect to get it, btw!)....of course, they didn't do this.
When I got my replacement, I insured it for 10% more than we paid for it, despite the appraisal that I submitted to the insurance company that came from the jewler. That way, I'm not paying for something that I'm never gonna get!
When I got my replacement, I insured it for 10% more than we paid for it, despite the appraisal that I submitted to the insurance company that came from the jewler. That way, I'm not paying for something that I'm never gonna get!
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