less_confused
Rough_Rock
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Appraised value vs retail value
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Richard Sherwood
Ideal_Rock
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- Sep 25, 2002
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Triple retail seems awful high, even for the "loose" appraisers.
What are you considering as "street price"? Average jewelry store retail value, average internet retail?
Another factor is the dollar value of the piece. Appraisals on high dollar value on done at much less of a markup than low dollar items.
Let''s say you''ve got an item which would sell for $5000 to $5500 from an internet vendor, or $5500 to $6500 from a retail jeweler, depending on his overhead and markup.
I would expect that item to appraise for an "average retail replacement value" in the $7000 neighborhood.
Nobody (legitimate) really appraises for triple retail anymore. That was pretty rare even when loose appraising was rampant.
What are you considering as "street price"? Average jewelry store retail value, average internet retail?
Another factor is the dollar value of the piece. Appraisals on high dollar value on done at much less of a markup than low dollar items.
Let''s say you''ve got an item which would sell for $5000 to $5500 from an internet vendor, or $5500 to $6500 from a retail jeweler, depending on his overhead and markup.
I would expect that item to appraise for an "average retail replacement value" in the $7000 neighborhood.
Nobody (legitimate) really appraises for triple retail anymore. That was pretty rare even when loose appraising was rampant.
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Rich- Sad to say, but I find "loose appraisals" are extremely common still.
It''s appalling how may sellers use "appraisal" value as a selling point- especially when you consider that in just about every one of these cases, the seller themselves are doing the appraisal.
In fact, we get a lot of calls where the question is "How much does that ring on your site appraise for?"
I explain to the caller that appraisal values are arbitrary unless more conditions are included- such as who is doing the selling, and in which market.
Yet it''s clear that this is a fertile subject as the misunderstanding are common.
It''s appalling how may sellers use "appraisal" value as a selling point- especially when you consider that in just about every one of these cases, the seller themselves are doing the appraisal.
In fact, we get a lot of calls where the question is "How much does that ring on your site appraise for?"
I explain to the caller that appraisal values are arbitrary unless more conditions are included- such as who is doing the selling, and in which market.
Yet it''s clear that this is a fertile subject as the misunderstanding are common.
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An appraisal, including the value conclusion, is only as useful as the appraiser who prepared it and to the extent that it applies to the question you are asking. It’s fairly common for jewelers to use a report describing some hypothetical situation where a piece might be sold at an extraordinarily high price as evidence that their own asking price is a bargain. On it’s face this is worthless but, in practice, it’s worth less than that. By encouraging you to rely on information that they KNOW to be false, or at least inapplicable, they are asking you to make a misinformed decision. You’ve learned far more about the dealer in this situation than you have about the piece.
Additionally, by encouraging you to use this document as a basis for an insurance contract they are recommending a plan that will increase your insurance premiums many times without you getting anything at all for your premium dollars. In the case of a loss, most insurance companies will replace the piece with another of ‘like kind and quality’ rather than cutting you a check for the face value of the policy. If you can buy it for ¼ of the declared value, you can bet that they can do the same (or better). Since the premium is based on the declared value, in effect you are paying 4x the premium for the exact same results in the case of a loss. Of course the insurers will accept this, what’s not to like? That’s the closest thing I can think of to getting money for nothing. It’s you who should be more selective in your choice of appraisers.
Anyone who wants to can call themselves an appraiser or a gem lab, regardless of their qualifications, skills or ulterior motives. The key is that you don’t have to care what they think. If you’re interested in what an item is worth in a particular marketplace, hire your own appraiser and talk to them about your objectives. Sometimes ‘free’ advice can turn out to be terribly expensive indeed.
Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver
Additionally, by encouraging you to use this document as a basis for an insurance contract they are recommending a plan that will increase your insurance premiums many times without you getting anything at all for your premium dollars. In the case of a loss, most insurance companies will replace the piece with another of ‘like kind and quality’ rather than cutting you a check for the face value of the policy. If you can buy it for ¼ of the declared value, you can bet that they can do the same (or better). Since the premium is based on the declared value, in effect you are paying 4x the premium for the exact same results in the case of a loss. Of course the insurers will accept this, what’s not to like? That’s the closest thing I can think of to getting money for nothing. It’s you who should be more selective in your choice of appraisers.
Anyone who wants to can call themselves an appraiser or a gem lab, regardless of their qualifications, skills or ulterior motives. The key is that you don’t have to care what they think. If you’re interested in what an item is worth in a particular marketplace, hire your own appraiser and talk to them about your objectives. Sometimes ‘free’ advice can turn out to be terribly expensive indeed.
Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver
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