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What Is Diamond Appraisal? Everything You Need To Know

What Is Diamond Appraisal? Everything You Need To Know

Selling a diamond ring or a pair of diamond earrings can prove more complicated than buying. Sure, you have to worry about certain things when buying diamonds like cut, clarity, and carat – but in the end, it comes down to the price and the looks. 

Selling your diamond is a whole different story because you’ll need the proper documentation. Without documentation, you may get only 50% of the price you actually paid for the diamond – even if you have the original receipt. 

To successfully and profitably sell you diamonds – you’ll need a diamond appraisal. 

In this article, we’re going to cover what is diamond appraisal, the different types of diamond appraisal, how it works – and how it differs from a receipt, grading reports, and purchase price

What Are Diamond Appraisals?

Diamond appraisals are special documents that contain all the critical information about the gem, including the four Cs (cut, carat, clarity, and color), the diamond’s measurements, and estimated value. 

In case the diamond comes in a setting, the appraisal document will contain the characteristics and value of both the diamond and the setting. 

For example, if you have a diamond bracelet, the appraisal document will hold all the bits of information about the diamond, the corresponding setting, and their separate and combined value. 

A diamond appraisal document is put together by certified diamond appraisers who need to have a solid understanding of diamonds. Moreover, they need to know how to estimate the value of a diamond based on its characteristics. 

Diamond appraisal experts don’t necessarily need to be gemologists or be approved by GIA – however, it’s better if they are.

Related Read: Diamond Appraisal Vs. Diamond Certification: Which One To Get?

How To Find A Good Diamond Appraiser?

Before picking a diamond appraiser, it’s always good to know what exactly you need from them. So, here are the key things an expert should offer you:

  • They should provide you with the necessary credentials. Every expert will gladly offer to show all the documents that prove they’re qualified for the job. 
  • A detailed explanation of what a diamond appraisal document is and what you need it for in your case.
  • Help you understand why you should always get your diamond appraised and inform you about the different types of diamond appraisals. 
  • Walk you through the appraisal process – inform you about the measurements they need to take, the lab work they want to perform, and why that’s necessary for the appraisal document.
  • They should also provide you with documents that contain a sealed statement of purposes and value. The document should also include the appraiser’s signature. 

In case you find an appraiser and think that something’s fishy about them, don’t hesitate to ask them about their certificates or credentials. It’s always better to ask – or find someone else – than to get scammed.  

What Information Should A Diamond Appraisal Document Contain?

As we already mentioned, a diamond appraisal document contains all the information about the physical features of a diamond and its corresponding setting, determines its quality, and assigns a value to it. 

If you’re still a bit confused about this, don’t worry. 

Let’s expand on this definition and learn more about all the concrete things a diamond appraisal contains.

A diamond appraisal contains the following things:

  • Name and address of the purchaser
  • Date when the document was filed
  • Article number
  • Purpose of appraisal
  • Intended use of the appraisal
  • Invoice and certificate number 
  • A detailed description of the diamond or the piece of jewelry
  • Retail value
  • Name and signature of the person who appraised the document 
  • Mounting attributes (type of mounting, weight of the setting, construction, finish, condition)
  • Diamond grading report (measurements, cutting style, carat weight, depth, table, girdle, cut grade, polish, symmetry, clarity grade, color grade, fluorescence)

Why Do You Need A Diamond Appraisal?

A diamond appraisal is required to determine the value of the diamond and the corresponding setting. 

In most cases, you’ll need a diamond appraisal for insurance purposes. If you want to insure your diamond in case it gets stolen or destroyed, the first thing your insurance company will ask you is the jewelry type and its value. 

In other words, they’ll ask you for the diamond appraisal document. 

With the appraisal document, your insurance company will know how much to charge you for your premium, and you can be sure that the compensation you get for your diamond in case of theft is accurate. 

A diamond appraisal contains information about the value of your diamond based on the current market prices – meaning that the value of your diamond can get both up and down. 

Diamond appraisals don’t have to be commissioned only for insurance purposes. Other reasons to get a diamond appraisal are:

  • For tax purposes
  • For determining the value of inherited jewelry
  • For future selling opportunities
  • For auctions
  • For proof that the diamond is yours (in case someone makes a claim on them)
  • To accurately split the value in the event of a divorce

Having an appraisal document for your diamond is never a bad idea. It’s always better to get one – even if you don’t need it at the time of buying. It could prove to be of use in the future. 

Related Read: How Much Does It Cost to Get a Diamond Appraised?

Types Of Diamond Appraisals

There are different types of appraisals depending on the diamond’s characteristics and the purpose you need the “inspection” for here. 

That said, there are three main types of appraisals you can receive. 

Replacement Value Appraisal

This type of appraisal is the most common one, and it’s usually required for insurance purposes. This document contains the value of your diamond based on the current market price. 

So, in other words, in the event of theft, loss, or destruction of the diamond, you’ll be able to get adequate compensation. 

Comparable Replacement Value Appraisal

This type of appraisal document is similar to replacement value appraisal. The key difference is that this document is for diamonds that can no longer be purchased on the market. 

One example of when you’d get a comparable replacement value appraisal is if your diamond has historical significance or has a unique and uncommon cut. 

Fair Market Value Appraisal

A fair market value appraisal document contains information about the amount you’re most likely to get in case you decide to sell your diamond. Moreover, it can also be issued for tax liability purposes and estate settlements. 

How Is A Diamond Appraised?

Diamonds are appraised by certified professionals or gemologists. These professionals will take specific steps to issue you your diamond appraisal document. 

While you don’t need to know precisely how a diamond is appraised, it’s always good to be at least familiar with what the appraiser is doing to fill out the document. 

So, here are brief descriptions of what a gemologist does while filling out a diamond appraisal certificate.

Step 1: Preparing The Diamond

Before the actual examination starts, the gemologist firstly needs to prepare the diamond. The examination process can start only when the diamond is pristinely clean. 

Step 2: The First Impression

The first thing an expert will determine is the shape of the diamond and the setting it comes in. This way, they can provide you with a detailed description of all the characteristics that can be seen with the naked eye. 

The gemologist will also examine the naked eye to look for imperfections. Large imperfections can be seen even without the use of a microscope. 

Step 3: Getting Into The Details

After the initial examination, the gemologist will need to look at the diamond with a microscope. While significant imperfections can easily be seen, smaller ones could remain hidden.

With the microscope’s help, the gemologist is sure to discover every imperfection no matter how small they are. 

Once that’s done, they will look for engravings on the piece of jewelry. 

Every diamond and every precious metal should have a serial number engraved in it. Because the engravings are usually tiny, the gemologist may use a magnifying glass or a microscope to find them. 

Step 4: Color Grading

Using a daylight lamp and special white cardboard, the gemologist will determine the color of the diamond and give it a color grade rate from D to Z. 

Step 5: Weighing The Diamond

Carat weight is determined by using a precise scale. In the case of loose gems, the weighing process is pretty straightforward. 

However, the weighing process gets a bit more complicated when it comes to diamonds in a setting. The gemologist may have to use additional methods to determine the precise carat weight. 

Related Read: Can You Measure Diamond Weight In Grams?

Step 6: Determining The Cut

Once the carat weight is established, the gemologist can move on to the cut. They’ll determine the cut of the diamond, its quality and note if it has any deficiencies.

Step 7: Looking For Fluorescence

Fluorescence is a significant characteristic of any diamond because it can have a huge impact on the diamond’s value. 

Fluorescence is actually the amount of gas a diamond contains, and the more considerable its amount, the more of its value the diamond loses. 

Do I Need A Diamond Appraisal If I Still Have The Receipt?

Many people think that they don’t need a diamond appraisal document if they save the original receipt. However, that’s not the case. 

The receipt you get when buying the diamond doesn’t contain the details an appraisal does. It may contain some information along with the price, like the setting or shape of the diamond – however, that’s still not enough. 

For example, you won’t be able to use the receipt for tax and insurance purposes because it doesn’t give any information about the quality of the diamond and current market value. 

Moreover, if you bought the diamond on sale, the receipt won’t reflect the actual value of the diamond. The same applies if the diamond is part of a set or in case you bought it at an antique store. 

In short: A diamond appraisal is the only document that guarantees you both the actual value and the characteristics of your diamond. 

Appraisal Vs. Resale Price

You may think that a diamond appraisal document is a guarantee you can sell your diamond for at least the sum you paid for it. Unfortunately, this isn’t true. 

In most cases, the value of the diamond in the appraisal document will run much higher than what you can actually sell it for. 

If you’re wondering why this is the case, here are several factors that contribute to the difference between the diamond appraisal price and resale price:

  • You may have the wrong type of appraisal – For selling purposes, you’ll need a fair market appraisal because this document contains information about the amount you’re likely to get when selling. On the other hand, if you only have a replacement value appraisal, you probably won’t be able to sell the diamond for the value listed in the document.
  • The diamond is in a settingLoose diamonds are easier to sell than diamonds that are encased in jewelry. Most people don’t like to have second-hand engagement rings, earrings, and bracelets. 
  • All retailers have a lot of overhead costs – Due to the overhead cost every retailer needs to pay, they won’t offer you the amount they can get when they sell it. In other words, retailers also need to make a profit. 
  • The value in the appraisal document is higher than the retail price – You’ll find that most people won’t buy a diamond from you because the retail price is lower than what your appraisal document values. 

When buying diamonds with the intent to sell them in the future and make a profit, it’s always best to get a fair market appraisal and wait for a favorable opportunity. 

Related Read: Diamond Price List: How Much Is A 0.1 To 40 Carat Diamond Worth?

Conclusion

A diamond appraisal is a document that can assist you in many ways. 

You’ll need it for tax and insurance purposes – in case of theft or destruction, for example. That’s not all, though. You might also get a good opportunity to sell your diamonds in the future – and a diamond appraisal can be of immense help in that situation. 

We recommend getting your diamonds appraised every 18 months because the values of both diamonds and jewelry fluctuate day by day. 

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