Appraisal Value vs. Offer Value

An appraisal for insurance and an offer from a buyer answer different questions. Confusing them is the single most common disappointment in selling jewelry, and it is entirely avoidable.

Replacement value

What it would cost to replace the piece with a similar new one at retail. This is the number on an insurance appraisal, because that is what the insurer would have to pay. It is the highest of all the values, often inflated further by appraisers who know a higher number pleases the owner. It says nothing about what anyone would pay you.

Fair market value

The price a willing buyer and a willing seller would agree on, neither under pressure, both informed. Used for estates, divorce, donations and tax. Typically a third to a half of replacement value for ordinary jewelry, higher for signed and antique pieces.

Liquidation or cash value

What the piece would fetch sold quickly, to a dealer, today. Metal at spot minus a percentage, stones at wholesale minus a margin, signature premium if any. This is the offer. For ordinary diamond jewelry, it is often twenty to forty percent of the original retail price.

Wholesale

What dealers pay each other. Offers to the public sit at or slightly below wholesale, because the buyer has to resell at wholesale or above.

Who produces each number

Insurance appraisals come from independent appraisers or from the jeweler who sold the piece; the latter has every incentive to write a high figure. Fair market appraisals come from certified appraisers and cost a fee. Offers come from buyers and are free, itemised if you ask, and binding for a stated period.

What to expect when selling

Take your insurance appraisal and divide by three for a first guess at ordinary pieces. Then use the tools on this site: the Gold Calculator for the metal, the Diamond Price Estimator for a certified stone, the Watch Valuation for a watch. Then get three itemised offers. If they cluster around your estimate, you have found the market. If one is far above, check it; if one is far below, ignore it.

When to pay for an appraisal

For insurance, always, updated every few years. Before selling, only for signed, antique or unusually fine pieces, and then from a certified appraiser who is not a buyer, with a fee, not a percentage of value. For everything else, offers are the appraisal.

Questions people ask

My appraisal says 8,000 and the offer is 2,500. Is the buyer cheating me?

Probably not. Replacement value at retail is typically two to three times what a buyer pays. Get two more itemised offers to be sure.

Does a laboratory report include a value?

No. GIA, IGI and HRD describe the stone and state no price. An appraisal is a separate document.

How much does an appraisal cost?

A flat fee per piece or per hour from independent appraisers; avoid anyone charging a percentage of the value, which rewards inflation.