Hi Stanley,
Obviously you’ve had some bad appraisal experience and you are
hardly unusual in this. I’m not defending lazy appraisal practices,
or even lazy appraisers who join NAJA but I do think you’re assigning
blame where it doesn’t belong. NAJA, ASA, AGS, ISA and similar
professional societies are working to make this mess of an industry
better. These are the good guys, not the culprits. I’ll try to answer
your specific questions:
That when I supplied an AGS certified ideal cut 1/2 carat diamond,
it wasn't noted on the appraisal that it was ideal cut, nor did
the value reflect it. I must admit, I didn't supply the cert in
that case since the transaction happened a year prior to the
appraisal and the client forgot it at home. However, it was easy to
see that it was a nice stone so further steps should have been
taken to look at the cut grade.
For an appraisal to be useful, it’s essential to correctly describe
the relevant attributes of item. Not noticing the cut of the stone is
either a serious error in the inspection or just sloppy gemology and
it will almost certainly lead to an inaccurate conclusion. Either
way, it was a bad job and it’s doing the client a disservice.
Incidentally, a diamond with AGS paperwork is worth more than the
exact same diamond without the paperwork so the appraiser should have
specifically asked for this report and included it in the appendix of
the appraisal. If the client (or you) refused to provide it or simply
insisted that it didn’t exist because they wanted to test the
appraiser or because they were hoping for and upgrade then they are
at least partially responsible for an inaccurate conclusion.
That if appraisers only "report" on the selling prices and not set
them why is then that a ring purchased from the Big Z, won't
appraise for the $1999 that the client paid ($2860 was the retail
price) Seems to me that if 2000 people bought that ring for the
1999 sale price then THAT is the value of the ring not cost of
materials times 1.7
I agree. 2000 actual transactions clearly establishes a reasonable
basis for valuation. The price on the tag is irrelevant, as is the
cost of the materials.
That I'm looking at my appraisers 20 year old digital scale and at
least a 10 year old cz master color set showing me that NAJA isn't
all that concerned with quality identification as it is with the
retail value on the appraisals.
Again, this is just sloppy gemology and lazy appraising. It is
absolutely essential that an appraiser maintain both their tools and
their skills in order to be offering a useful service. Correct
identification of the value characteristics of the item is an
essential component of good appraisals. In the case of diamonds, this
includes color and for most jewelry and gemstones it includes the
weight.
Maybe the appraisals should be named for what they aRe:
-Absolute lowest price on a barely acceptable replacement that your
insurance company would pay for Valuation or -I got shafted in the
islands Valuation or -I just beat up the local jeweler and brought
my gun to buy this Valuation
I agree, they should, and appraisals that comply with the NAJA
appraisal standards do! Definition of value is an important element
to a professional appraisal. Without it, the report is useless.
Most of my clients would like to see an appraisal for slightly
over what they paid. They just want to have a small amount of
wiggle room for varying market conditions or if I move down to the
islands by the time they go to replace the item so that they can be
sure that they are completely covered in case something happens.
Like I said before, the Absolute lowest price on a barely
acceptable replacement appraisal does not instill confidence in the
appraisal, jeweler, nor the insurance company.
For most pre-loss insurance type appraisals, which is most jewelry
appraisals, the definition should not be for the absolute lowest
price on a barely acceptable replacement. The standard is generally
for the necessary funding to replace new with like kind and quality
in the case of a loss. Omitting important quality characteristics
like the known name of the artist who designed the piece or the
grading details of the diamond is clearly not being accurate and
perhaps wildly so. Second guessing what a craftsman ‘should’ be
charging is also clearly inappropriate. If an artist charges (and
gets) the big bucks for their work then it is reasonable to expect
that they will charge big bucks to make the replacement. Estimating
their cost of materials may be a useful step in estimating what they
will charge to make the replacement but it’s hardly the whole process
and the fact that other craftsmen may be willing to do superficially
similar work for less money is generally beside the point. It’s not a
Picasso unless Picasso painted it.
The possibility that you might move and raise your prices is NOT
something that should be considered in a typical appraisal. An
appraisal must have a valuation date and this date cannot be in the
future. The value should be based on a particular item, in a
particular marketplace, on a particular date using all available
Usually the valuation date is the date of inspection but
there are exceptions.
Neil