Jewelry Appraisals Guide

Whether you own one piece of fine jewelry, or a drawer full of heirloom pieces, having appraisals for your items is something you should thoughtfully consider. Jewelry Appraisals can help you decide whether a piece of jewelry is worth it’s advertised price, protect jewelry you already have, help you with estate and tax planning, and assist in selling items you no longer want. An appraisal assigns value based on the cost to replace an item, or determines its fair market price. Jewelry Appraisals consider the current price of precious metals, value of gemstones, and effort and skill required to produce the piece. Some also include adjustments based on other factors including the popularity and availability of similar items.

Buying Appraised Jewelry

Often what we think something is worth and what is appraises for are vastly different. For example, this tiny pink sapphire ring with a lightweight gold band appraised much higher than the larger diamond and gold ring that weighs five times as much shown below it.  Why? Because the the 58 tiny pink sapphires are each set with individual prongs, requiring a lot of time and effort by the jeweler. It also happens to be made of 18k gold, whereas the diamond ring is set in 14k. The 18k has about 17% more gold, gram per gram,than 14k.

 

 

 

 

You also need to consider the source, and type of appraisal when it’s part of your decision to purchase an item. A company that does nothing but appraise jewelry for an auction house will often document a much higher value than you would see if you took the item to a local appraiser. These are often not reputable companies. Compare the two appraisals below.

The one on the left was completed for an auction in Los Angeles. Notice that there is no date, no documentation of  the price of gold at the time of the appraisal, and the level of detail and accuracy are seriously lacking. What information is present is inaccurate, or outright exaggerated.  A genuine appraisal done by a reputable jeweler, like the one shown on the right completed at Pounder’s Jewelry in Spokane, will always include gold pricing, specific stone measurements and quality assessments for all gemstones and the date of the appraisal.

An appraisal done in a large city with a high cost of living will generally come out higher than one completed in a smaller, lower cost area, due to the respective differences in the price of goods.  Jewelry costs more in Los Angeles than it does in Spokane and the value of the appraisal will reflect that. However this doesn’t excuse or explain over-inflated appraisals and inaccurate information. Use caution when using the appraised value advertised by the seller in your decision making process. Due to the variance in appraising organizations and locations, you should always verify the reputability and location of the appraisal service.

Make sure the appraiser is a Gemological Institute of America (GIA) Graduate Gemologist, or holds certification from the American Gem Society (AGS), and do a quick web search on the company they work for. Paying $4,500 for a ring with a $10,000 appraisal from Los Angeles might get you a piece of jewelry worth less than you paid for it where you live.

Conversely, buying jewelry appraised in a city with a low-cost of living could net you an increase in value if you do live in a high priced city.

Why Appraise Jewelry?

If your jewelry didn’t come with an appraisal from a reputable appraiser in an area with a reasonable cost of living, you might want invest in one. Whether you have a special piece or dozens of items, an appraisal can be critical for insurance, resale, estate planning and charitable donations. When you have a piece of jewelry appraised, you are documenting its value at a specific point in time and generally, for a specific purpose.

Completed by a skilled and accredited appraiser, an appraisal serves as proof of ownership and value for law enforcement, insurance agencies and anyone you might sell to. In the event your home is burglarized, your item is taken from you, or you lose the piece, an appraisal will help you recover or replace your valuable jewelry.

If you decide to part with your jewelry and plan to sell it, an appraisal will help you get the best price.  The document shows a buyer exactly what they are paying for and helps you negotiate the highest amount possible, reducing fear of dishonesty on both sides.

 

 

Appraisals are also good for estate planning. If you have decided to divide your jewelry among family members upon your death, knowing how much each piece is worth can help you make decisions about how to allocate items in your will. If you are donating jewelry to charity, an appraisal will ensure you, or those filing taxes after your passing, can take advantage of the maximum deduction for charitable donations.

When donating jewelry to charity, remember that the cost of the appraisal is often tax deductible under miscellaneous deductions.

When to Appraise Jewelry

If your jewelry didn’t come with one, you’ll have to decide whether to have an appraisal completed. The decision to pay for an appraisal depends on many factors. You should first determine the goal for having an item appraised. Second, you should consider the cost of appraising as opposed to the value of your item.

If you are documenting for insurance purposes, check with your provider to find out their maximum per incident or per item reimbursement. This is commonly $1,000 but can vary widely. If you only have one or two items and they are covered in full under your existing policy, you may not find the cost of an appraisal to be a worthwhile investment.  However if you have any one piece that is valued higher than the policy limit, an appraisal will prevent you from taking a loss if that item is lost, stolen or damaged. Be sure you ask your your insurance provider if their coverage limits are per item or per loss event. Even with an appraisal, you may need to increase your coverage level.

 

 

Some things, like Great-Grandma’s engagement ring, are truly priceless. If you have a special item which has a lower value in dollars, but you find irreplaceable, consider an appraisal to aid in recovery. Appraisals can be shared with law enforcement, jewelry stores, pawn shops and gold buyers so they can keep an eye out for a thief trying to sell your jewelry. You can also post information from the appraisal (such as measurements, size, photos and other details) in ads in local papers, on sites like Craigslist, and on social media to spread the word.

Estate planning can be simplified by having items appraised and included in your will. If you want to divide your estate evenly among family members, the appraisal will help you quantify how much you are leaving to each person. If you have a lot of items, appraisals can help your executor to know which piece is which. When your estate is distributed, recipients will know the value of the item. Too often someone inherits a piece of jewelry and needs to sell the piece later. Without an appraisal, they may fail to realize the most value when selling.

When appraising to sell, it’s important to remember that you will virtually never get the full appraised value when you sell a piece of jewelry. Most appraisals are “retail replacement value.” If  you were in a jewelry store, paying full price for a brand new item, you might pay something near retail replacement value. Think of it as “suggested retail price.”  Very few people buy new at that price, and used items are typically lower. If you are selling to a dealer of any kind, expect to get about 10% of the appraised value. You may get as much as 40% if you are selling to another individual.  This is where cost to value comes in. A ring you recently paid $700 for might have a retail replacement value of $1,250, allowing you to sell it for $125 -$500. If a $60 appraisal will help you sell your ring to an individual for hundreds more than a dealer would have given you, it may be worth every penny.

Don’t forget to update appraisals when there have been major market increases in precious metals. That ring you had appraised when gold was only $600 an ounce is worth considerably more at today’s gold price!

Types of Jewelry Appraisals

Depending on the purpose of your appraisal, you may get different values for your jewelry item. Appraisals for replacement value will be higher than those for charitable donations. As discussed above, the cost of replacing an item is not necessarily the same as what it’s worth to a buyer.

Retail Replacement Appraisals – These are typically done for the purpose of insuring an item. This type of appraisal ensures that if your item is damaged, destroyed, lost or stolen, you can have another made to match the original. In most cases, standard insurance policy coverage for lower value items does not require an appraisal. Items above the limit on your policy may require a special rider that specifies the value of each piece. You must have an appraisal for these items. Note that in the event of a claim, most policies will only replace or repair your jewelry. If you want to receive cash for a jewelry claim, you’ll likely pay a higher premium.

 

 

Fair Market Value Appraisals – This kind of appraisal is used for estate planning and charitable giving. The IRS will only allow you to deduct the value of the jewelry at it’s current market value, so if  you are appraising for this purpose, be sure to let your appraiser know. This may also be your choice for estate planning. If you will be leaving a substantial sum to your heirs, a fair market value appraisal might be to their benefit when they file taxes.

If you are appraising specifically in advance of selling an item, you’ll have to choose the type of appraisal. There are pros and cons to each. A higher dollar, retail replacement appraisal will highlight your item’s full worth to a buyer. It’s also preferred by the purchaser because it gives them an insurance-ready document. This is a bonus you should highlight when selling!

If your goal is to determine how to price your item, you may prefer a fair market value appraisal. Factors such as style, condition, age, rarity and brand all influence pricing. Even though an item is expensive to replace, it may not have significant value in resale. A common, mass produced 1970’s wedding ring in a style that is no longer popular will be worth less than an antique ring style experiencing a resurgence in popularity, even if they contain have similar complexity and identical quantities and sizes of gold and diamonds.

Jewelry Appraisal Cost

How much you pay for your appraisal depends on where you live, competition for services, your relationship with the shop, and how many items you appraise at a time.

Large cities like Los Angeles and New York have a much higher cost of living and therefore might charge more for appraisals. In a smaller city, the low cost of living may make appraisals more affordable. The price may also be lower in an area known for it’s large number of competing jewelers and appraisers.  If you have a good relationship with a local jeweler who knows you personally, they might offer you a special rate. Be sure to call several reputable organizations and find out what is included in the paperwork. Some offer digital copies along with paper, or presentation folders to hold the appraisal.

Most appraisers also charge more for the first appraisal, and less for subsequent items submitted at the same time. This makes it cheaper overall per item to have six items appraised at one time rather than one or two at a time. For example, if the cost is $60 for the first item, and $35 for each additional, it will be $125 less to do them all at once.

Things Grandma Kept provides a free retail replacement value appraisal with all fine jewelry items priced over $500. Our appraisals are done by a local, reputable jeweler in Spokane, Washington, Pounder’s Jewelry. The appraised value you see is not exaggerated or based on what you would pay on Rodeo drive. This makes it easy to know if the jewelry you fell in love with is worth the price, and simplifies adding it to your insurance after you receive it. Our goal is to always provide a fair and honest price for your next piece of vintage, antique or estate jewelry!

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