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Getting the most out of your jewelry appraisal.
Many customers who buy a diamond also buy an independent appraisal shortly thereafter. There’s a whole litany of reasons for this that are discussed at length elsewhere but there is very little discussion on how to shop for an appraiser and how to get the most out of your session after you’ve chosen one. Most cities have a listing of people who are willing to sell you a document that they will call an appraisal. These will range in price from zero to hundreds–or even thousands–of dollars. The difference is in the details. Here follows a brief explanation of how to get your money’s worth from an appraisal.
Terminology
An appraisal is a report, either written or oral, describing an object and a related marketplace. It usually involves describing a theoretical transaction wherein the object is sold in an ‘arms length’ transaction between at least two unrelated parties. For example, it could be a statement that the estimated retail replacement price of a similar item at a jewelry store in Denver would be $xxx. An appraisal will always declare a value and an explanation of what market is being described.
An Appraiser is someone who prepares appraisals. They may do other things as well.
An authentication report is a statement of the important qualities of a particular object. This may be a GIA Diamond Quality Report or it may be a report demonstrating that Elvis once owned a particular ring or that Cartier made it. In all three cases, this is an important piece of the value. Authentication reports are also available on coins, fine art, sports memorabilia and most other kinds of items that people wish to have appraised. The appraiser may or may not be the same as the authenticator.
Hiring an appraiser.
The first thing required in hiring an appraiser is that you must decide what it is that you want to know. “What is this worth?” is simply not a sufficient question. Professional appraisers work on many different kinds of projects that involve different kinds of requirements. Estate taxes and legal work have different requirements than pre-loss insurance documentation. A tutorial of this nature is far to short to go into all of the different issues so, for the purposes of this article, I’m going to make a few assumptions about what you will be wishing to learn about your item:
1) The item in question is jewelry, it’s new, and you are looking for information that will be useful in either returning it to the seller or for purposes of insurance coverage if you decide to keep it.
2) The item is in your possession and it will be possible for the appraiser to physically examine it.
3) You want both valuation and gemological authentication services.
4) There are no important attributes that are not immediately obvious by an examination or that are not supported by documentation that you will provide (for example, the claim of Elvis’ ownership from the above paragraph).
Just from reading my list, you probably have a good idea who you’re looking for and what you expect them to do. You want someone who has the skills and the tools required to do the authentication. You want someone who is familiar with the market that’s of interest to you; you want someone who will tell you the truth, unfiltered by their own side interests; and you want someone that will prepare a report that will be useful to you in a timely fashion.
An appraiser will list an assortment of credentials and tools on their website and in their advertisements. If you are looking for something that requires specialized tools, like Sarin scans or gemprint for example, check to make sure that your appraiser has the required tools available before you schedule your appointment. In the US, the most widely recognized gemological credential is the Graduate Gemologist Diploma issued by GIA. GIA is a college that teaches gemology. They have quite a few competitors who also do an excellent job but you should be careful to understand any credential that you are relying on. GIA also has several other programs that can result in claims like “member of the GIA alumni association” or “GIA Graduate”. Pay attention. A GG after their name is a good sign, as is FGA, FGAA, and FCGmA. If you don’t recognize it, ask about it before you hire them. They should be happy to explain.
Several different schools, including the American Society of Appraisers, the International Society of Appraisers, the National Association of Jewelry Appraisers, and the American Gem Society, teach valuation and appraisal theory. All of these have good programs. There are probably more that I don’t know about. The important thing here is to understand that what is being taught in these programs is not the same as what is taught in the GG or FGA programs. You want an appraiser that has both.
Independence is a mixed bag. Here’s the problem. If you want a highly trained and fully equipped professional who is living off of appraisal fees, you can expect to be charged for their work. Some actually charge quite a bit. If the appraisal is just a few sheets of additional paper that accompany the sale with a description and a made up number, they are usually free or at least very inexpensive. It goes back to deciding what you want to know. The same is true of authentication reports. If you require a report from an independent lab (like GIA or AGS), then the stone will cost a little bit more and there is a fee that is built into the price of your stone. If the word of the seller is sufficient, they will usually be happy to offer their opinion cheaply. For most people seeking appraisal services, independence is worth the extra cost. Just to be clear, what I mean by independence is an appraiser who is not in the business of buying or selling jewelry and who is not otherwise involved in the transaction in any way (such as by being employed by or related to the buyer, seller, or manufacturer).
All of the major appraisal societies offer referral services for their graduates and members. Most are online. Pricescope and many of the other popular educational websites also offer indexes that list appraisers in your area. Many appraisers are members of your local Better Business Bureau and many will advertise in the local yellow pages or similar venues.
The appraisal session.
After you’ve chosen an appraiser, you will set up an appointment with them to examine your item. Before you go in, again go over in your mind exactly what you are trying to learn. You are about to hire an expert to act on your behalf and you want to get the most for your money. Take all of your documentation with you. This includes the original receipt, the boxes and warranty certificates that may have been included, any grading reports supplied, and any previous appraisals on the item.
Clean every item thoroughly and make sure you have all parts and pieces of anything that’s broken.When you sit down with the appraiser, explain to them what you have and what you would like them to do for you. Don’t show them your documents unless they ask but let them know that you have them with you.
Before they start, discuss what fees you should expect for this session and be sure that you are comfortable with them. They should also give you an estimate of how long the project will take. Most single item appraisals can be done while the client waits but some large projects or very busy appraisers may take some more time.
They will probably ask you to fill out a form before they start working. This is sort of like filling out the paperwork at your doctor’s office before the visit. They will want to know your name and contact information, what the purpose of the appraisal is, and similar information that will help them to zero in on the assumptions that I made at the beginning of this tutorial. Changes in these assumptions can make a tremendous difference in the approach and conclusions for the appraisal assignment so it’s important to answer these things up front. If you will be leaving the items to be picked up later, this contract will become part of the receipt for your property, otherwise it will be simply a work order for the appraisal.
If you’ve ordered gemological or authentication services, this will usually come first. This means identification and examination of all gemstones, testing of the metal, examination of the hallmarks and similar physical tests. Often they will be able to tell you things about your jewelry that were not previously included by the seller so feel free to ask questions. Assuming that you are waiting, they will probably tell you the results of the various tests as they do them. If their results are different from what your paperwork says, you should discuss it at this time. This is especially true if they disagree about the nature of the material (are they really emeralds?), the grading of stones (when compared to the lab report) or with representations made by the seller that will be important in your decision to keep the piece. Make sure that there isn’t a simple misunderstanding or mismeasurement that’s causing the discrepancy. This is the time to discuss your grading reports, authorship reports and the like; everything but the money.
After the gemological work, the appraiser will take some time to measure, weigh and photograph the piece as well as write a full description. They will probably want to scan or photograph some of your various documents as well so that these can be included in the final report. They will then do some research into the market. They will choose a market based on the answers you gave on the take-in form. You will get very different results depending on whether they are considering a forced sale to a pawnshop or layaway program at a tone-y jewelry store. This research can take anywhere from a few minutes to a few months depending on the nature of the piece, the market chosen, and the resources and time constraints of the appraiser. If their research will take more than a few minutes, they should be able to give you back your items at this point and the remainder of the assignment can be done over the phone and by mail.
Interpreting Results
After you get your appraisal, now what? If you found important discrepancies in the description, these will be clearly spelled out in the description section. This is usually what will be required in order to return it to the vendor. If the appraiser thought that your diamond was misgraded, this should be clearly stated in the description. It may say something like XXX diamond accompanied by a report issued by XYZ lab identifying it as YYY with a copy of the lab report attached or it may just give the graders opinion. Your receipt from the seller will usually give their terms explaining what to do in this circumstance. Read them carefully and comply with every clause.
If you find the valuation is alarmingly low, read the description again. The appraiser may have missed an important detail, like the brand of the designer, manufacturer or diamond, or they may have a critical error, like calling platinum white gold. Feel free to call them and discuss the matter. Also check the market being described. It may be different from the market where you bought the piece. If they are discussing the resale value used on the secondary market and you bought it new directly from the designer’s boutique, it is almost certain that they will find a lower value than what you paid.
The opposite is also true. If the valuation is especially high, make sure you understand why. It may, indeed, be that you got a fabulous bargain. It may also be that what the appraiser is describing is not an accurate depiction of what you bought. Most often, this comes up because the client made their purchase at a discount or internet seller and the appraiser chose local retail as the comparable market. This kind of change in market can be quite significant.
Most people are surprised at the size of the document at the end. Often it can be up to 10 or 20 pages for a single item appraisal! All of this extra paper does serve a purpose. It clearly documents what you have, who the appraiser is and what they did and didn’t do in the examination. It should explain all terms used and it should give enough detail that it’s possible to replace your piece at some time in the future based entirely on the contents of the report. If the insurance company offers you something that doesn’t meet your requirements, this document will be what is used to define what was lost and what they are obligated to replace. It will spell out that you are not related to the appraiser and that they were not either the buyer or the seller. It will say exactly what market they are describing and why that market was chosen. All of this is intended to protect both the client and the appraiser in case there are problems later with the insurance company, with the seller, or with anyone else where you need to thoroughly establish the nature of your property.
Insurance.
One of the primary reasons for getting an appraisal is for purposes of securing insurance coverage. In addition to your own uses, the insurance companies require it because it defines exactly what it is that they are insuring. Insurance is a highly regulated business and it varies greatly from company to company, from country to country, from state to state and even from city to city. It’s important to read the details of your insurance policy and to make sure you understand it before you sign. At the risk of repeating myself, this is a contract, read it.
Most insurance companies agree in the policy to replace a lost piece of jewelry with another one of ‘like kind and quality that has substantially similar age, authorship, and condition’ or other words to that effect. What they mean by this is that they will buy you another ring in the case of loss.
They generally will NOT cut you a check for the amount on the appraisal.
For this reason, it’s in your best interest to be certain that the appraisal that you supply them contains all of the information that you feel is important about your jewelry. If you looked long and hard for a blue fluorescent stone and would feel cheated if the company replaced it with one that was not, make sure that’s in the description. Designer names, model numbers, ‘hearts & arrows’ photographs, lab reports and the like can all be important. If it’s important to you, their client, it’s important to them. Most insurance companies really do want to treat you right but they can’t do it if you don’t tell them. At the same time, if they aren’t fulfilling their obligations, it’s helpful to have your ducks in a row and have everything documented.
Neil Beaty, GG ISA
Independent Appraisals in Denver
Many customers who buy a diamond also buy an independent appraisal shortly thereafter. There’s a whole litany of reasons for this that are discussed at length elsewhere but there is very little discussion on how to shop for an appraiser and how to get the most out of your session after you’ve chosen one. Most cities have a listing of people who are willing to sell you a document that they will call an appraisal. These will range in price from zero to hundreds–or even thousands–of dollars. The difference is in the details. Here follows a brief explanation of how to get your money’s worth from an appraisal.
Terminology
An appraisal is a report, either written or oral, describing an object and a related marketplace. It usually involves describing a theoretical transaction wherein the object is sold in an ‘arms length’ transaction between at least two unrelated parties. For example, it could be a statement that the estimated retail replacement price of a similar item at a jewelry store in Denver would be $xxx. An appraisal will always declare a value and an explanation of what market is being described.
An Appraiser is someone who prepares appraisals. They may do other things as well.
An authentication report is a statement of the important qualities of a particular object. This may be a GIA Diamond Quality Report or it may be a report demonstrating that Elvis once owned a particular ring or that Cartier made it. In all three cases, this is an important piece of the value. Authentication reports are also available on coins, fine art, sports memorabilia and most other kinds of items that people wish to have appraised. The appraiser may or may not be the same as the authenticator.
Hiring an appraiser.
The first thing required in hiring an appraiser is that you must decide what it is that you want to know. “What is this worth?” is simply not a sufficient question. Professional appraisers work on many different kinds of projects that involve different kinds of requirements. Estate taxes and legal work have different requirements than pre-loss insurance documentation. A tutorial of this nature is far to short to go into all of the different issues so, for the purposes of this article, I’m going to make a few assumptions about what you will be wishing to learn about your item:
1) The item in question is jewelry, it’s new, and you are looking for information that will be useful in either returning it to the seller or for purposes of insurance coverage if you decide to keep it.
2) The item is in your possession and it will be possible for the appraiser to physically examine it.
3) You want both valuation and gemological authentication services.
4) There are no important attributes that are not immediately obvious by an examination or that are not supported by documentation that you will provide (for example, the claim of Elvis’ ownership from the above paragraph).
Just from reading my list, you probably have a good idea who you’re looking for and what you expect them to do. You want someone who has the skills and the tools required to do the authentication. You want someone who is familiar with the market that’s of interest to you; you want someone who will tell you the truth, unfiltered by their own side interests; and you want someone that will prepare a report that will be useful to you in a timely fashion.
An appraiser will list an assortment of credentials and tools on their website and in their advertisements. If you are looking for something that requires specialized tools, like Sarin scans or gemprint for example, check to make sure that your appraiser has the required tools available before you schedule your appointment. In the US, the most widely recognized gemological credential is the Graduate Gemologist Diploma issued by GIA. GIA is a college that teaches gemology. They have quite a few competitors who also do an excellent job but you should be careful to understand any credential that you are relying on. GIA also has several other programs that can result in claims like “member of the GIA alumni association” or “GIA Graduate”. Pay attention. A GG after their name is a good sign, as is FGA, FGAA, and FCGmA. If you don’t recognize it, ask about it before you hire them. They should be happy to explain.
Several different schools, including the American Society of Appraisers, the International Society of Appraisers, the National Association of Jewelry Appraisers, and the American Gem Society, teach valuation and appraisal theory. All of these have good programs. There are probably more that I don’t know about. The important thing here is to understand that what is being taught in these programs is not the same as what is taught in the GG or FGA programs. You want an appraiser that has both.
Independence is a mixed bag. Here’s the problem. If you want a highly trained and fully equipped professional who is living off of appraisal fees, you can expect to be charged for their work. Some actually charge quite a bit. If the appraisal is just a few sheets of additional paper that accompany the sale with a description and a made up number, they are usually free or at least very inexpensive. It goes back to deciding what you want to know. The same is true of authentication reports. If you require a report from an independent lab (like GIA or AGS), then the stone will cost a little bit more and there is a fee that is built into the price of your stone. If the word of the seller is sufficient, they will usually be happy to offer their opinion cheaply. For most people seeking appraisal services, independence is worth the extra cost. Just to be clear, what I mean by independence is an appraiser who is not in the business of buying or selling jewelry and who is not otherwise involved in the transaction in any way (such as by being employed by or related to the buyer, seller, or manufacturer).
All of the major appraisal societies offer referral services for their graduates and members. Most are online. Pricescope and many of the other popular educational websites also offer indexes that list appraisers in your area. Many appraisers are members of your local Better Business Bureau and many will advertise in the local yellow pages or similar venues.
The appraisal session.
After you’ve chosen an appraiser, you will set up an appointment with them to examine your item. Before you go in, again go over in your mind exactly what you are trying to learn. You are about to hire an expert to act on your behalf and you want to get the most for your money. Take all of your documentation with you. This includes the original receipt, the boxes and warranty certificates that may have been included, any grading reports supplied, and any previous appraisals on the item.
Clean every item thoroughly and make sure you have all parts and pieces of anything that’s broken.When you sit down with the appraiser, explain to them what you have and what you would like them to do for you. Don’t show them your documents unless they ask but let them know that you have them with you.
Before they start, discuss what fees you should expect for this session and be sure that you are comfortable with them. They should also give you an estimate of how long the project will take. Most single item appraisals can be done while the client waits but some large projects or very busy appraisers may take some more time.
They will probably ask you to fill out a form before they start working. This is sort of like filling out the paperwork at your doctor’s office before the visit. They will want to know your name and contact information, what the purpose of the appraisal is, and similar information that will help them to zero in on the assumptions that I made at the beginning of this tutorial. Changes in these assumptions can make a tremendous difference in the approach and conclusions for the appraisal assignment so it’s important to answer these things up front. If you will be leaving the items to be picked up later, this contract will become part of the receipt for your property, otherwise it will be simply a work order for the appraisal.
If you’ve ordered gemological or authentication services, this will usually come first. This means identification and examination of all gemstones, testing of the metal, examination of the hallmarks and similar physical tests. Often they will be able to tell you things about your jewelry that were not previously included by the seller so feel free to ask questions. Assuming that you are waiting, they will probably tell you the results of the various tests as they do them. If their results are different from what your paperwork says, you should discuss it at this time. This is especially true if they disagree about the nature of the material (are they really emeralds?), the grading of stones (when compared to the lab report) or with representations made by the seller that will be important in your decision to keep the piece. Make sure that there isn’t a simple misunderstanding or mismeasurement that’s causing the discrepancy. This is the time to discuss your grading reports, authorship reports and the like; everything but the money.
After the gemological work, the appraiser will take some time to measure, weigh and photograph the piece as well as write a full description. They will probably want to scan or photograph some of your various documents as well so that these can be included in the final report. They will then do some research into the market. They will choose a market based on the answers you gave on the take-in form. You will get very different results depending on whether they are considering a forced sale to a pawnshop or layaway program at a tone-y jewelry store. This research can take anywhere from a few minutes to a few months depending on the nature of the piece, the market chosen, and the resources and time constraints of the appraiser. If their research will take more than a few minutes, they should be able to give you back your items at this point and the remainder of the assignment can be done over the phone and by mail.
Interpreting Results
After you get your appraisal, now what? If you found important discrepancies in the description, these will be clearly spelled out in the description section. This is usually what will be required in order to return it to the vendor. If the appraiser thought that your diamond was misgraded, this should be clearly stated in the description. It may say something like XXX diamond accompanied by a report issued by XYZ lab identifying it as YYY with a copy of the lab report attached or it may just give the graders opinion. Your receipt from the seller will usually give their terms explaining what to do in this circumstance. Read them carefully and comply with every clause.
If you find the valuation is alarmingly low, read the description again. The appraiser may have missed an important detail, like the brand of the designer, manufacturer or diamond, or they may have a critical error, like calling platinum white gold. Feel free to call them and discuss the matter. Also check the market being described. It may be different from the market where you bought the piece. If they are discussing the resale value used on the secondary market and you bought it new directly from the designer’s boutique, it is almost certain that they will find a lower value than what you paid.
The opposite is also true. If the valuation is especially high, make sure you understand why. It may, indeed, be that you got a fabulous bargain. It may also be that what the appraiser is describing is not an accurate depiction of what you bought. Most often, this comes up because the client made their purchase at a discount or internet seller and the appraiser chose local retail as the comparable market. This kind of change in market can be quite significant.
Most people are surprised at the size of the document at the end. Often it can be up to 10 or 20 pages for a single item appraisal! All of this extra paper does serve a purpose. It clearly documents what you have, who the appraiser is and what they did and didn’t do in the examination. It should explain all terms used and it should give enough detail that it’s possible to replace your piece at some time in the future based entirely on the contents of the report. If the insurance company offers you something that doesn’t meet your requirements, this document will be what is used to define what was lost and what they are obligated to replace. It will spell out that you are not related to the appraiser and that they were not either the buyer or the seller. It will say exactly what market they are describing and why that market was chosen. All of this is intended to protect both the client and the appraiser in case there are problems later with the insurance company, with the seller, or with anyone else where you need to thoroughly establish the nature of your property.
Insurance.
One of the primary reasons for getting an appraisal is for purposes of securing insurance coverage. In addition to your own uses, the insurance companies require it because it defines exactly what it is that they are insuring. Insurance is a highly regulated business and it varies greatly from company to company, from country to country, from state to state and even from city to city. It’s important to read the details of your insurance policy and to make sure you understand it before you sign. At the risk of repeating myself, this is a contract, read it.
Most insurance companies agree in the policy to replace a lost piece of jewelry with another one of ‘like kind and quality that has substantially similar age, authorship, and condition’ or other words to that effect. What they mean by this is that they will buy you another ring in the case of loss.
They generally will NOT cut you a check for the amount on the appraisal.
For this reason, it’s in your best interest to be certain that the appraisal that you supply them contains all of the information that you feel is important about your jewelry. If you looked long and hard for a blue fluorescent stone and would feel cheated if the company replaced it with one that was not, make sure that’s in the description. Designer names, model numbers, ‘hearts & arrows’ photographs, lab reports and the like can all be important. If it’s important to you, their client, it’s important to them. Most insurance companies really do want to treat you right but they can’t do it if you don’t tell them. At the same time, if they aren’t fulfilling their obligations, it’s helpful to have your ducks in a row and have everything documented.
Neil Beaty, GG ISA
Independent Appraisals in Denver
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