Essential Questions
What exactly is an appraisal?
When is an appraisal report needed?
When is an appraisal report inappropriate?
Is an appraisal a legal document?
Is an appraisal a guarantee?
Can an item, appraisal or appraiser be “certified”?
What qualifications should I look for in an appraiser?
How do I know that an appraiser is qualified?
Can a jeweler appraise my items?
How do I arrange for an appraisal?
How do you do an appraisal?
How do I get the items to you?
How do I avoid loss or damage to my jewelry in transit?
How much does an appraisal cost?
How long does an appraisal take?
Essential Answers
What exactly is an appraisal?
An appraisal is:
- A written statement, independently and impartially prepared by a qualified appraiser, setting forth an opinion of defined value of an adequately described property, as of a specific date supported by the presentation and analysis of relevant market information. (Federman, National Jeweler 1986, p.44).
- An educated, informed objective opinion of value based on a stated purpose and function.
An appraisal is not:
- A verbal guess of price or cost on the basis of a cursory examination of an item or a digital photograph of an item.
- The paper that a jeweler may provide to you; it's a statement of value. Their value.
When is an appraisal report needed?
- When the owner of jewelry wishes to insure the replacement cost.
- To determine Actual Cash Value in the case of an insured loss. Casualty is loss allowed by the IRS as an income deduction for lost items not recoverable by insurance based upon documentation that establishes values for the lost articles.
- When an executor or trust officer requires a Fair Market Value for estate purposes whether to list the items in a taxable estate or for equitable distribution among heirs.
- In the case of divorce, the parties or attorneys may request an appraisal for the dissolution of commonly held property.
- A charitable donation appraisal is required if jewelry or gemstones are donated to a public institution, charity or museum. IRS rules apply.
- Liquidation of assets.
- Scrap or melt value is used sometimes to determine the value of large amounts of items made of precious metals.
When is an appraisal report inappropriate?
First, let me say that I would like to take your money but there are some situations that do not warrant my involvement. Here are some examples:
- "Just curious".
I'm glad you're curious about the things you have inherited or own. That attitude makes for one more informed consumer. However, because there is no stated purpose or function in the exercise, anyone can tell you anything depending on where they stand in the marketplace. There is no single price for gems or jewelry because we buy and sell in so many markets and for so many reasons. Your best bet for satisfying your curiosity is to do research on your own. This can turn into quite an adventure and may be time consuming but it will open your eyes to the many ways jewelry is bought and sold. - "We're thinking of buying a diamond ring, but we want to make sure that we are getting the best deal. Can you meet us at the store and confirm what the salesman is saying is true?"
The short answer is "no". The short answer is “no”. I try to avoid getting between a retail merchant and his potential customer because there is so much that has transpired by the time I arrive, I could end up making three enemies and causing a lot of confusion. You need to shop around. If the retail merchant has taken the time to sit down with you and explain diamond or colored gemstone grading, shows what he or she has in stock, answers your questions to your satisfaction and has what you want, then you have initiated a very important relationship. A relationship of trust is as important with your jeweler as it is with any other professional. If you feel you are being rushed into a sale, leave and think about it. Do not be pressured into buying something that may not be what you really want or because it's on sale. There are two books that I highly recommend, that de-mystify the buying process: Diamond Ring Buying Guide by Renee Newman, G.G. and How to Select, Buy and Care for Diamonds with Confidence and Knowledge by Antoinette Matlins. - "I'm thinking of selling some of my jewelry, can you help?"
In order for me to be as objective as possible, I do not buy, sell or broker gems and jewelry but I can point you in the right direction for finding a buyer. I also can help you to determine Fair Market Value (FMV) of your jewelry in preparation for selling. The Restricted Use appraisal report that I prepare will be just for you, as the owner. It will help you decide whether or not you want to sell as well as explain the value considerations that were taken into account when arriving at the dollar amount of the Fair Market Value of the pre-owned jewelry. If this particular report is used as a selling tool, it is rendered null and void. The details of the jewelry or gems, or value considerations, may be used to explain to anyone what they are looking at during a transaction. However, do not make the mistake of handing over the report. The report was prepared for a specific market, i.e. FMV, NOT insurance replacement of a new piece of jewelry. If this sounds confusing, contact me and I will explain further. - "I bought this diamond off of the Internet and I want to make sure that the "Certificate" is right and that I got what they said it was."
A written appraisal report is not appropriate in this case because this scenario is kind of like an urgent “Just curious”. I would call this an “I'm worried” request for assurance. The report that you received is inappropriately called a “Cert” or “Certificate”. If the report is a GIA diamond report, it is a QUALITY report. GIA does not certify any diamond, it merely reports the quality considerations apparent in the cut, clarity, carat weight and color. It was included with your purchase to justify the price you paid for the diamond and it helps the seller avoid liability. With larger diamonds, a lab report is asked for by most insurance companies. Any gemologist can confirm or deny that the diamond matches the report and this should be done as quickly as possible so that you can return the diamond if you are not happy. A written report would have no purpose or function other than to get you calmed down. The Internet is a good place to start shopping but be aware that you can't really see the diamond. The unique characteristics of diamonds cannot be conveyed with a picture on your screen and a group of parameters that may or may not mean anything to you. I firmly believe that beauty is highly subjective and cannot be quantified. - "I buy and sell jewelry. I need to hire you to write reports for my stock so that people will believe me when I tell them what they are buying."
This is a request for a sales tool. I don't write these kinds of reports because of the inherent conflict of interest in this kind of business transaction. Many things can and do happen as a result of an “appraiser” working for the jewelry trade in this capacity. The seller could pressure me into putting a particular value or value consideration down on paper for an item that is unrealistically high and then sell the item for half of the “appraised” value to prove what a great deal the buyer got. The people that ask for this kind of service sometimes refuse to pay for the service if the “appraiser” doesn't agree with the numbers requested by the dealer or he/she ask for a discount so that they can pass the cost of the report on to the buyer. There is no objectivity or honesty, for that matter in providing paper that has no basis in reality. The buyer could also return to the report writer, in the case of an insured loss, because the insurance company refuses to pay the stated value amount. I also do not want to see my insurance replacement report on eBay for ten years while the markets shift and changes. Would you? The dealer is not the end user and the jewelry is not personal property until someone buys it. If you ever see an appraisal report whose name and physical address is the jeweler or dealer's address or if the report is for “To Whom It May Concern”, don't walk, run away. However, I do help some retailers with their inventory to establish value in their particular market. There is a difference, ask me.
Is an appraisal a legal document?
An appraisal is not a legal document per se. However, it is admissible as evidence in certain types of court cases. Fiduciary responsibility varies from state to state. A written appraisal does support legal documents, insurance documents for example, and is frequently used in probate review of estates, divorces, bankruptcies and liquidations.
Is an appraisal a guarantee?
An appraisal document is not a guarantee. It is a written informed opinion backed up by experience, education and instrumentation. If it is conducted by an independent appraiser, it is the best evidence of an item's identity and value that can be obtained.
Can an appraisal or appraiser be “certified”?
In a word, no. While the words "certificate", "certified appraisal", "certified report", and "certified appraiser" have slipped into the language of the jewelry industry, their use is incorrect and misleading. As the GIA explains clearly, “We have identified the following incorrect practices: 1) references to GIA Reports as “certificates”; and 2) the statement that students, graduates, their businesses, or particular gemstones are “certified” by GIA. The Gemological Institute of America does not certify anyone or anything. Neither a student nor a graduate who has been awarded a certificate or diploma, nor a gem which has been graded or identified by GIA has been “certified” by GIA.”
What qualifications should I look for in an appraiser?
Basic requirements are:
- Formal education in gemology
- Training in principles of valuation
- Training in evaluating various manufacturing methods
- Experience in buying and selling
- Knowledge of various levels of value and how they affect the market from source to consumer
- Knowledge of current wholesale and retail prices of gemstones, jewelry and watches
- Knowledge of actual sales prices with access to verifiable data
- A complete gemological laboratory
- It should be clear that appraising is a discipline separate from gemology, with a recognized education and certification program for the appraiser to follow. Mastery of principles and methods and allegiance to a code of ethics are only the start. Education must remain on a continuing basis. (Anna Miller, Gems and Jewelry Appraising, 1988).
How do I know that an appraiser is qualified?
Ask questions! Anyone who is appraising jewelry should be able to tell you when they received their gemology degree, what professional appraisal association they belong to, and how long they have been appraising. Remember, you're the customer. All of these questions can be introduced in casual conversation or you can conduct an interview prior to any commitment. You can also ask someone you trust for a referral.
Can a jeweler appraise my items?
A reliable appraisal is an independent, objective and qualified opinion of value. No person who is selling an item can be objective about that item's value. Your jeweler may be willing to appraise your jewelry but he or she is basing their appraisal on what they know in their business or store. They are not basing the appraisal on market research. There is also a problem with over valuing jewelry in order to make the retail customer feel they got a great deal from the jeweler. This often backfires because you may end up paying unnecessarily high insurance premiums. If this happens to you, ask the jeweler retailer if they are willing to buy back the jewelry for that amount before you leave the store!
How do I arrange for an appraisal?
Contact me. We'll discuss your needs and arrange for a time and place to meet. If you do not live in greater Tacoma and Olympia area, an appraisal can still easily be arranged, and the items delivered by courier. I have served a number of clients outside of my immediate geographic area and all work is done by appointment only.
How do you do an appraisal?
First we make an appointment convenient to you. Yes, I can work bank holidays and weekends but not without an appointment. I do not take 'drop ins'. All of my gemological equipment is portable, in case your attorney wants the work done in his office or your property is in a bank vault. I always take a few minutes to review the purpose and function of your appraisal needs and to separate out items that do not need to be included in your finished report. Then the inspection starts. If further research is necessary beyond the scope of my library and contacts, I will inform you at the start of my work. You are welcome to ask questions as I work. It's as much fun for me to teach you about what I do as it will be for you to learn more about your personal property. You will leave my office with your jewelry and the report. Payment is due upon receipt.
How do I get the items to you?
If we cannot conveniently meet, items can be sent by insured mail or courier (e.g. FedEx).
How do I avoid loss or damage to my jewelry in transit?
Items that are lost or damaged are covered by insurance, assuming that you properly insured the items before sending them. I certainly do not send anything back to you without insurance.
How much does an appraisal cost?
It depends. Contact me directly for this information. I either charge by the piece or by the hour. If you have three or more items, it would be more appropriate to use the hourly rate option as you would be charged a total more than the hourly rate. Although I work quickly, complicated pieces take more time and accuracy must not be sacrificed for the sake of saving money, especially if the report is going to be used by a third party such as an insurance company. If you only want me to work for one hour, I will stop and print out what we have covered at that point. All professional personal property appraisers either charge by the hour or the piece. If someone tells you that their fees are contingent on the value of the property, run away. This is a highly unethical practice that is slowly being abandoned for obvious reasons but some people still prey on the unwitting consumer.
How long does an appraisal take?
That depends on how complicated the jewelry is or how many pieces there are to include in the report. I work quickly so that your time and my time are not wasted. If the items are highly unusual or one of a kind items, I spend more time in research and will justify it in my report. Normally, for one simple item, you can leave my office in 30 - 45 minutes.