Money

Appraising a Diamond – What is your Ring Actually Worth?

A house has investment value. It builds equity. So does a diamond. Just as you would ask a house inspector to check for defects and materials, you’d ask a diamond appraiser to inspect for flaws and authenticity, and whether the “price is right.”

Need for Appraising a Diamond

Purchasing a diamond represents a major investment for most buyers; hence, it is imperative that they engage in the process with all five senses finely tuned. Jewelry suppliers may or may not provide accurate information, so the buyer could suffer the consequences in the future. It also makes good business sense to have a second opinion for such a purchase, because heaven forbid if you ever need to re-sell the diamond for major surgery in the future, you’d want peace of mind that you’ll get bang for your buck. You want the blue and the fire in that diamond you bought decades ago to exhibit the same characteristics of a blue chip stock.

How Does a Buyer Find an Appraiser?

How does one go about making sure that the diamond is everything it is represented to be? First, the buyer must obtain the services of an accredited and certified gemologist to appraise the diamond. This professional appraiser must possess the proper training and equipment to perform a thorough and highly scientific analysis. Only when this expertise is available can a potential buyer be assured that the appraiser’s analysis is exact and based on facts that can be proven.

Gemologists can act as appraisers provided they are properly accredited. Gemologists must have a Graduate Gemologist Diploma from the GIA, with certificates in GIA Diamond Grading, GIA Colored Stones, and GIA Gem Identification. The American Gem Society also issues credentials such as titles that run the gamut of Registered Jewelers, Certified Gemologists, and Certified Gemologist Appraisers. If appraisers possess any of these certifications, a buyer can be assured that they have received proper training in gemstone analysis and appraising. However, having these credentials alone is not sufficient.

A very important aspect in choosing independent appraisers is to make sure that they are truly in a position to be objective. If they have any partnership or are employed with the jewelry dealer and there are opportunities for them to earn a certain amount of profit, their appraisals and reports may not be 100% accurate.

To be entirely independent, appraisers do not engage in the activities of buying or selling, and they should either work for just the buyer or the seller, but not for both. They must not grant requests from jewelry dealers for grading jobs, because if they have already graded the stone, they cannot be thoroughly unbiased. Hearing appraisers reject certain stones is a good indication that they are being critical and objective. This is a plus for the buyer. If an appraiser issues a positive report on every stone he is shown, there is a strong chance that the appraiser may be biased and not really acting independently.

The Process of Appraising a Diamond

The buyer should make an appointment to meet with the appraiser in person, who will explain what the appraisal covers. The exercise will definitely cover the traditional 4 Cs: carat, cut, color and clarity. Appaisal costs vary, but they usually fall within the $75-$100 range, or in increments of $50 or so for every 15 minutes.

If the stone has already been purchased, this appraisal process should still be followed. While it is convenient to do, under no circumstances should the buyer send their diamond to an appraiser through the mail, even with insurance. Given that appraisers need to perform many tests, the buyer should be prepared to leave the stone with them for a few hours. This factor alone necessitates that you take your stone to a licensed appraiser, not just to anyone who is the friend of a friend of a friend.

Appraisers will consider the attractiveness of the stone in terms of what gemologists refer to as “table”, “depth percent” and symmetry. They will check for color and clarity in relation to fluorescence and for other items of interest such as additional facets when it comes to the diamond’s cut. They then determine if the diamond has inclusions; not just those that can be seen by the naked eye but also with a jeweler’s loupe. The diamond will also be measured by weight. Gemstones have a basic unit for weight, called the carat, which is the equivalent of a fifth of a gram. One carat has 100 smaller units termed points. A 50 point diamond therefore is also considered .5 carat. When speaking of size, diamonds are expressed in millimeters.

Appraisers use specialized equipment (and even a lab) to finalize findings for the potential buyer. It is at their discretion if they will ask the buyer the price he is paying for. If thed don’t ask, it should in no way influence the buyer’s decision.

What Else Do Appraisers Do?

Finally, appraisers may come up with an appraisal document, which should meet the criteria of professional appraisal societies. This document package should include letters of request and introductions between the buyer and appraiser. The appraisers’ resume and credentials should be included, as well as the terms of conditions of the appraisal process. There should be specifics regarding the grading system, and how the concluding appraisal was determined in conjunction with current market value. It should also include anything affecting insurance risk. Should the buyer, after an appraisal, decide to purchase the diamond, appraisers can assist with discussions regarding proper insurance coverage. They will issue a Certified Replacement Appraisal for Insurance Purposes, along with a certificate of authenticity.

Potential buyers should bear in mind that appraisers work independently for a client for the specific purpose of either buying or selling a diamond. In other words, appraisers may be considered when selling a diamond as well, so if the time comes for resale, the diamond owner may find it just as important to involve the services of these professionals to protect their investment.

Overall, the minimal cost of a professional appraiser’s services far outweighs the consequences of not using one. What could happen when flaws are discovered that you were not aware of? Accredited, professional appraisers can also answer questions that a buyer may be hesitant to ask the jeweler or selling party. After an in-depth evaluation with an accredited appraiser, a buyer should feel the relief that buying the diamond was, indeed, the “purchase of a lifetime”.

Impress Your Appraiser

So that the appraiser is not tempted to take you for a ride, you may want to “show off” to him the amount of wisdom you’ve learned about diamonds. That way he knows you’re not coming in from the cold or wet behind the ears.

If you ask him the right questions, you’ll have the confidence that he will not take you for granted. You can of course start with the 4 Cs – get the fundamentals out of a library book or on the Internet.

When you’re satisfied that he’s answered your questions on the 4 Cs adequately, you could go on to the lighter side of things and start talking about the actual diamonds that were associated with fame and glory.

You can, for instance, ask him if your stone resembles anything like the Sancy. If he suppresses a giggle and says no, you can then ask, “what about the Cullinan?” Again, he’ll probably say no, but this time you’ve probably impressed him like no other.

Finally, just say, “oh well, I thought I invested in the best. So tell me, does my diamond come close to the Dresden Green at least? I’d even settle for the Spoon Maker diamond.”

Related posts

The Secrets Behind No Money Down Furniture Advertisements

Staff

Personal Finance Rules to Live By

David Beart

What is a Reverse Mortgage

Staff

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.