Step 6: Appraising
Types of Appraisals
Four basic types of appraisals yield four different kinds of value.
- Replacement Value
- Fair Market Value
- Wholesale Value
- Liquidation or Scrap Value
The first two values are retail amounts. The latter two are variations of wholesale rates. You’ll almost always do replacement value appraisals for gem and jewelry owners and consumers. You’ll likely conduct wholesale appraisals, too. These are done in a similar manner. Of course, in these cases you’re researching the prices a jeweler would expect to pay.
Occasionally, your customers may ask you to value a lot. If the lot is too large to examine every piece, take a sample large enough to show every variation in size and quality. Then, multiply the sample’s value by the total size of the lot. For example, if you looked at 20% of the stones as your sample, multiply your results by five.
Appraising Gems for Specialized Markets
Conducting appraisals involves researching recent sales of like items for comparison. Thus, appraising gems and jewelry like diamond earrings can be fairly simple. However, you’ll also encounter more difficult objects.
Let’s say your customer wants an appraisal for a…