Jewelry Appraisal

Whether for insurance purposes, estate purposes, fair market value, or sheer curiosity, a professional appraisal is the only way to have accurate information on the current value and quality of your jewelry and gems.

What is an appraisal, anyway?

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“My sister said I should get an appraisal…”

As you can imagine, many people come in to our fine jewelry gallery, asking for “an appraisal,” but they don’t know if they actually need one.

At one end of the spectrum are folks that want the value of an appraiser’s expertise, but without paying the commensurate rate for that expertise: “Can you just tell me if it’s real or not?” Well, don’t be surprised if a legit appraiser is not going to do much more than a quick look and a guess if you want free advice. You see, at that point, the appraiser is doing you a personal favor by engaging the value of their experience to your benefit…but for most expert appraisers, that generosity only extends to what can be determined at arm’s length or with only the simplest of testing.

At the other end of the spectrum, there are folks that might be ready to sign up for paying an appraiser’s hourly rate, but not actually need to spend a dime: “Yeah, I need this appraised so I can sell it.”

To make sense of the latter example, we should probably delve first into the mystery of . . .

retail replacement appraisal fair market value appraisal alara jewelry bozeman montana

What Kind of Appraisal?

That’s right. There are different kinds of jewelry appraisals. Below is a partial list: 

Retail Replacement Value Appraisal

• Commonly requested for the purpose of insuring

• Possibly useful for estate planning

• Occasionally requested for “Damage and Loss” assessment Partially useful in preparing for sale to an individual (in conjunction with Fair Market Value appraisal) 

Fair Market Value Appraisal

• Estate Appraisal

• Donation Appraisal

• Tax purposes, generally speaking

• Partially useful in preparing for sale to an individual (in conjunction with Retail Replacement Value appraisal) 

Marketable Cash Value Appraisal

• Requested in divorce calculations

• Useful for estate planning 

An appraisal is typically a written document, signed by the appraiser who performed the assessment. So, when someone strolls in, wanting to cash out their jewelry, but requesting an appraisal, we try to set them straight as early in the discussion as possible.

You see, the closest thing to what they want is a "bid to buy." That’s right—they want to know what the Fair Market Value of their item is. Well, there’s a far more reasonably-priced way to get that information than securing an appraisal…and that’s to ask, at places in the area that are actively engaged in purchasing such items from the public, what their offers would be. Because that is the definition of Fair Market Value: what a willing buyer and willing seller would agree to, price-wise, for the item to change hands, at a certain place, at that particular time. 

Willing buyer, willing seller. You do not have to sell it if you don’t like the offer. But you just found out what the market will bear, without paying for an expert appraisal.

And then there’s the myriad reasons for which you are required to get an appraisal, which are all insurance-, legal-, or tax-related.

Insurance appraisals are based on Retail Replacement Value in most cases. They can occasionally be based on Auction Replacement Value. Either way, preparation of such documents will bill out by a qualified appraiser based on an hourly rate.

Fair Market Value appraisals and Marketable Cash Value appraisals require greater expertise, primarily because they are associated with legal events. Because of that, they often bill out at double or triple the hourly rate of insurance appraisals.

Keep peace in the family...

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So, in order to follow the stipulations of your will, your family will have to liquidate all the items, and split up the resulting funds according to your instructions. Or, someone within the group of heirs would need to be able to “purchase” the items from the estate.

Typically, that’s not what people have in mind when they set up their will. What people intend is for some pieces to go to each heir. At that point, each heir can decide what to do with their pieces: keep them, re-set them, sell them.

So, it’s my recommendation that you instead have a Marketable Cash Value appraisal performed. In fact, you wouldn’t even need to get it typed up—because you will just learn the values of each piece, and then you would personally assign specific pieces to specific heirs, right in the text of your will (or in an addendum).

At one-third to one-half the hourly rate of an FMV appraisal, and with all the peace of mind that picking specific pieces brings to a difficult time, you will be doing everyone a huge favor.

What makes me qualified to appraise jewelry?

What pieces should I get appraised for insurance?

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As you can imagine, the amount of time it takes to appraise a piece of jewelry varies drastically. Gold chains usually take no more than ten to fifteen minutes apiece. Conversely, a piece with many different types, sizes, shapes, and grades of gemstones can take several hours…as do antique pieces that require diligent research.

But let’s talk more typically…a one-carat diamond solitaire ring:

Assuming the diamond in the ring is not of the highest three clarity grades, this ring would generally take

• 40 minutes to appraise for insurance purposes x $150/hour = $100

• 50 minutes to appraise for estate purposes x $450/hour = $375

[The additional time involved in an estate appraisal has to do with all the back-end referencing the appraiser must do, as they must be prepared to defend their conclusions in court, whether they are called into court or not.]

But no matter what type of appraisal, the complexity (and therefore the price to perform it) varies with: 

• how many different types of gems require identification, measurement, weight calculations, color grade, and clarity grade (providing any grading reports from laboratories will cut back on that time)

• how unusual the gem shapes and types are

• how many different design elements require detailed description in order to adequately aid in later replacement, if needed

What now?

If you’re realizing that you possess jewelry that has values higher than you could comfortably afford to replace, it’s time to get those items appraised and insured. Most insurance companies require items be reassessed every three years. [Please note that my reassessment rates are as reasonable as they come.]

Your first step is to schedule a Pre-Appraisal Assessment, so we can determine your appraisal costs before we begin appraising. Schedule your Pre-Appraisal Assessment here.

If you’re at that stage in life that you are getting your will in order, consider scheduling a Marketable Cash Value appraisal, so you can be in control of determining which heirs inherit which pieces, and save a lot of future unfriendly debate among your family members.

No matter what—as your local jewelry appraiser, know that if you have questions about the identification or appraisal of your gems or jewelry, no matter the reason, I am ready, willing, and able to answer them!