retail replacement value vs reality??

[usfpike703]

I''m not sure if this is where to ask this but... I purchased an engagement ring recently and I''m not sure if I''m second guessing the appraisal or just over thinking this.

The graduate gemologist/appraiser, who is GIA certified wrote the retail replacement value of $16,620.00
and the EGL-USA GEM ID Card says $20,300.00.

Both identify the diamond as :

Weight 2.20 CT
Shape PRINCESS
Color H (EGL G-H)
Clarity SI3
Measurements 7.19 x 7.18 x 5.14 mm

I paid less then both but want to know how these numbers are created and which is more accurate?

 

[AprilBaby]

I would guess what you paid is most accurate.

 

[dbsdiamonds]

https://www.pricescope.com/community/threads/what-are-your-thoughts-on-egl-usa-los-angeles-certs-are-tey-reliable.93353/

The first issue is to understand the grading issues of EGL vs. GIA. From there an EGL H SI2 (not SI3) 2.20ct PC is like an $8k stone. So here comes in the gimmick of appraisals vs. reality.

Some appraisers are hardball conservative cost type appraisers and there are appraisers that will jack it up to the sky on value to make something appear to be better than it is. 5 different appraisers will yield 5 different "values". But $20k is quite nonsensical.

You can find a quality appraiser in your area at www.ags.org or Mr. Denver Appraiser around here can really give you the skinny on this topic.

Marty
CEO/Pres
Diamond Brokerage Service, Inc
www.dbsdiamonds.com

 

[denverappraiser]

Thanks Marty. I’ll try to be precise, if not particularly brief.

Any statement of value has to have an element of what it’s worth to whom, when, and under what circumstances. The answer to this should be written right in the body of the appraisal report and it’s part of your ‘retail replacement value’ statement. In appraiser parlance, that’s known as the ‘purpose’. The purpose comes from a negotiation with the client right at the beginning of the assignment and there are actually quite a few choices that include things like bankruptcy liquidation or valuation for various tax matters (like charitable contributions for example).

In most jewelry appraisals where the purpose is stated as retail replacement value, this means something like what it would cost to custom make or purchase a comparable replacement item, new, at local retail. Even that isn’t precise enough to really produce a useful number because ‘local retail’ can vary tremendously depending on where you go and often there's nowhere near enough information included to custom make a replacement. There is obviously some hooha going on and this begs the question of what the real purpose of the appraisal was. In most cases, the answer to this is ADVERTISING. If the ‘appraisal’ was given to you by the jeweler as part of the sale and it was presented to you as as evidence of a bargain, that’s what you got. Some are listing the highest price that a jewelry store might be willing to put on a price tag with the understanding that they are under no obligation to make actual sales at that price and others are trying to accurately represent what a doodad like yours would reasonably be expected to cost in the sorts of stores that are actually making sales. If you can’t tell what it means from reading the report, call up the appraiser and ask them what their value conclusion means. Appraisers are NOT all the same and I'm embarrassed to say that most are pretty bad.

With big diamonds, getting a reality check is pretty easy. Pricescope offers a nifty utility at the top of the page titled ‘pricescope your diamond’ where you can enter in an assortment of specs and get anywhere from a few to hundreds of bonafied offers from real dealers who are eager to sell you something. Operators are standing by. If you don’t get many offers, make the parameters a little broader and try again. There are a few traps in making sure you’re comparing apples to apples but that’s a good place to start.

By the way, GIA doesn’t certify appraisers. They don’t even teach appraising. They’re a college for gemology. To be sure there are some top rate experts who graduated from there (as well as some who didn’t) but the presence of a GIA diploma doesn’t mean that they’re even a good grader. It says nothing at all about their qualifications as an appraiser.

Neil Beaty
GG(GIA) ICGA(AGS) NAJA
Professional Appraisals in Denver