I Could Replace This for ...
Research in the appropriate market results in a defensible appraisal value
Some people think an appraisal is the price at which you can replace an item. In reality, an appraisal is the value reflecting that items selling price in the market. The difference, you ask?
Not every store can replace every item with like kind and quality. For example, a diamond cluster ring bought for a few hundred dollars in a discount store is probably very thin and set with stones that are barely transparent. Most retail jewelers could provide a ring of the same style, but not many would be willing to put their name on one as thin and poorly crafted. In fact, theyd have trouble even finding such a ring through their established wholesale suppliers. So in writing an appraisal, how would you value such an item?
Going to Market
Value should be determined based on the appropriate market level, which is the type of venue through which an item is most likely bought. Authorized Rolex retailers sell new Rolex watches, so they represent the market level for new Rolexes. Discounters are the most likely retailer of very thin gold and poor-quality diamond cluster rings, so thats the market level to research for that product.
A caution: If an item is marked Bulgari, an appraisal that reflects a value at which a local retail jeweler could copy the item regardless of how well-known or how highly respected the retailer is a disservice to the client and requires the assumption of copyright infringement on the part of the jeweler. In this case, you must contact Bulgari. If Bulgari wont divulge pricing information, youll have to rely on comparables from companies such as Van Cleef & Arpels, Cartier and Harry Winston. These companies have items and reputations similar enough to a Bulgari to compare for your appraisal.
Some suppliers are tightlipped about the pricing of their merchandise, especially if youre not one of their retailer clients. But there are ways around information obstacles. Watch companies are often unwilling to give pricing information, so you can pose as potential clients who, of course, must have catalogs with prices. You also can request catalogs through toll-free numbers listed in trade magazines. Making a monthly trip to your local shopping mall to collect fliers from national retail chains, an easy way to maintain a body of pricing information for some market levels.
Many jewelry appraisers skip the step of researching market levels because its time-consuming and takes them out of their stores. But identifying market levels and doing research within the appropriate level results in a much more credible appraisal. It also provides a solid body of information to defend an appraisal if the need arises.
By Julie Nash, G.J.G., A.M. and Arthur Skuratowicz, G.J.G., N.J.A.
Julie Nash, G.J.G., A.M., and Arthur Skuratowicz, G.J.G., N.J.A., operate Anton Nash LLC, Independent Jewelry Appraisers and Jewelry Trade Consultants, Colorado Springs, CO; (888) 440-6274, www.AntonNash.com.