Jewellery appraisal

busymumof3

I am currently in the same position as the OP and have found that obtaining valuations for gemset pieces a bit of a minefield.

I was quoted £60 an item with a wait time of 4-6 weeks to have pieces individually valued. So the first judgement is to decide whether each piece is worth paying an individual fee for - not particularly easy if you are no expert. Then it's a case of where to sell. The jeweller who did the valuation may be interested, or do you tout round other jewellers, sell on Ebay with a reserve or put it to auction with seller fees of about 20% and no sale price guarantees.

With plain gold pieces at least they can be weighed, the hallmark is usually easy to determine, and gold prices on the day are easily found on the net to weigh up what you are offered.

gem-man, I would be interested in what your advice would be. Having inherited a bunch of older stuff that would never be worn in it's current form, I probably would be looking to get one or two of the bigger/better diamonds reset into more current settings. There are other stone-set pieces that I would wish to sell though and wonder what the best way of doing this is.

I did take some pieces to a second smaller specialist antique jeweller who gave me a quick and dirty estimate there and then. They would have been willing to make me offers on two of the items. I came away with the suspicion that these items were worth a lot more to those knowing a lot more than me!

gem_man

EL123 wrote: »

I want to be sure of a fair price, but I expect if I go to a few jewellers then I should be ok. I was thinking/hoping that they did appraisals for free, or am I being naieve?!

Firstly apologies for the delay in responding, I thought I would be notified when further comments came in.

Ok, so we have established that you want to part with these items.
No, you are not being naive at all. The jeweller that sells secondhand/antique jewellery makes his living from BUYING and SELLING jewellery. I don't know of any jewellers that charge for making an offer on an item of jeweller. Why would they? They cannot sell old jewellery unless they buy it first, you cannot have one without the other, so most are very keen to make an offer (if it is an item that they think they can resell).
The figure offered will be what he/she thinks would be a fair price to pay to allow him/her to add a reasonable profit (yes, even jewellers need to eat) and sell it from the window.
In short, they will not charge for an offer because buying/selling is where they make their money.

Now, it is possible to have a valuation (quite a different thing from an offer) that indicates the likely cash that could be raised in the event of disposal. This is called a Fair Open Market Valuation.
An Independent Jewellery Valuer will charge you for this of course (yes, we need to eat as well) because supplying appraisal documentation is how we make our money. We don't buy and sell.

A jeweller could also provide such a service but would charge of course if he/she is doing a good job and providing documentation. Remember this service is NOT the same thing as an offer to buy.

Generally speaking a Fair Open Market Valuation is usually unnecessary as the expense just eats into the money you will get when it is actually sold. The exceptions to this statement occur when someone needs to know theoretically what the item will fetch, so they can plan a particular course of action but may not actually want to sell it just now.
The other exception would be with very high value jewellery where the penalties of someone not knowing what they are doing are greater and the fee for the report is incidental compared to the value of the item.

In closing, I would recommend that you go a few jewellers in your area that actually sell secondhand similar items to what you have. Be straight, tell them you are thinking of selling and could they make an offer on the items.
Once they have made the offer, ask them how long the offer is good for (some may place a time limit).
Check out the others and make your decision.
The chances are, they will all be similar offers, the variation purely being the degree to which they think THEY will be able to sell the items and how many similar items they may already have.

Be mindful that "I would think this would fetch about £XX". That is not the same thing as getting someone to put their hands in their pockets and actually pay you the money. Very easy to say when they are not the ones handing over the hard earned cash.

I hope this has helped. Sorry for the size of the post.

Kind regards
Adrian

gem_man

Hi busymumof3,

I am a little confused here (as indeed I think you are).

You need to be sure you don't use the word "Valuation" when trying obtain an offer. It sounds like the jeweller was going to organise a valuation for you. His next question should have been "for what purpose do you want the valuation?" as there are several different types, all with different wording, function, purpose and end value.

When you are wanting a jeweller to buy from you, you need to ask for an OFFER.

My advice to you would be to go to a jeweller that has been established for a while and discuss the remounting of the diamonds that you would like to keep. Ask him/her for an estimate to do the work and also ask them to make an offer on the unwanted items and the remains of the items that the diamonds came out of. You are more likely to get a higher offer on these bits as the jeweller is making a profit on the remounts also.

This is a note to all that are considering selling items and feel that the offer is low.
I do not buy and sell jewellery, I only value items so very often I have folk coming to me complaining that so-and-so jeweller tried to rip them off by offering way under what the item is worth. Generally speaking, the reason the offer seems low is because the owners expectations of what the item will sell for is unrealistically high. Usually their perception stems from an Insurance Valuation which is a totally different thing and bears no relation to the selling value of the item. Another reason is that some has said "You should get about £XXX for this" without actually having any intention of buying it themselves. Easy thing to say.

Ok, of course, there is always going to be the odd crook in any trade, but they really don't last very long in our trade. The businesses that have been around for a while are still there because they operate in the spirit of fairness, trusted by their customers and supported by the rest of the trade. Crooks are given the cold shoulder by everyone and they are soon off to try their luck in another trade.

Not totally sure this has answered your question busymumof3, if not, come back again.

Adrian

busymumof3

Many thanks gem_man. Initially we required a value for probate purposes which we ended up getting from the Jeweller where a number of the pieces were purchased from. Perhaps not surprisingly, market value was anything from 25% to 40% of the actual amounts originally paid up to 20 years ago.

At least we now have a paper value and can decide what to do with the individual pieces at our leisure.

I appreciate your advice re. resetting stones.

gem_man

Glad you are getting sorted out BusyMumof3

Initially we required a value for probate purposes

Ah Probate valuations ...... they are a different story again.

For the benefit of those visiting this thread in the future........
Probate Valuations (or Confirmation of Will in Scotland) are used to assess Inheritance Tax or Death Duty due from the deceased estate to the Taxman when the estate of the deceased exceeds a certain figure.

In essence, the ascribed value is equal to the likely figure the item(s) would fetch in an unforced open auction at the date of death.

In practice:
An Independent Jewellery Valuer will research actual auction results for items (min 6) of equal merit (or make adjustments to reflect any differences if near exact comparables cannot be found in sufficient quantity to give a true picture) over the previous 12 months prior to the date of death. The figure returned will be the modal average of these results

A Retail Jeweller will either follow the above rule or base the figure on what he would normally be willing to pay for these items at the date of death. In theory, the figures should be similar. In practice there can be a difference as the jeweller who basis the value on his buying price is only considering a single "snapshot" of perspective (ie his) rather looking at a larger picture. HMRC do not seem to make a distinction between the two at the point of settling the Probate.

In any event BusyMumof3, you now have a reasonably accurate picture of the values relative to one-another in the collection and it will provide a reasonable sound base from which you can proceed.

It comes as no surprise that the quoted values represent a fraction of the purchase price or valuation for insurance replacement values as Probate is the second or third lowest value that could be applied to the items (there are other types of values that are lower still, Valuation for Loan Security for example).

This jewellery valuation lark is not as straight forward as it first appears, is it?

The secret is to be totally open and explain in detail what purpose the valuation is to perform when asking someone for a valuation. Although, true professionals will ask sufficient questions to get to the bottom of that factor before proceeding.
The vast majority of problems I see, stem from a misunderstanding at the outset of the dialogue. It is not always the jeweller's fault, I have to say, some members of the public are inclined to think it clever to try and "outsmart" the valuer or withhold certain information. Open-ness is the key.

Yet again, I have rambled on a bit...... sorry.

Kind regards
Adrian

Mrs_justjohn

gem_man wrote: »

Glad you are getting sorted out BusyMumof3


Ah Probate valuations ...... they are a different story again.

For the benefit of those visiting this thread in the future........
Probate Valuations (or Confirmation of Will in Scotland) are used to assess Inheritance Tax or Death Duty due from the deceased estate to the Taxman when the estate of the deceased exceeds a certain figure.

In essence, the ascribed value is equal to the likely figure the item(s) would fetch in an unforced open auction at the date of death.

In practice:
An Independent Jewellery Valuer will research actual auction results for items (min 6) of equal merit (or make adjustments to reflect any differences if near exact comparables cannot be found in sufficient quantity to give a true picture) over the previous 12 months prior to the date of death. The figure returned will be the modal average of these results

A Retail Jeweller will either follow the above rule or base the figure on what he would normally be willing to pay for these items at the date of death. In theory, the figures should be similar. In practice there can be a difference as the jeweller who basis the value on his buying price is only considering a single "snapshot" of perspective (ie his) rather looking at a larger picture. HMRC do not seem to make a distinction between the two at the point of settling the Probate.

In any event BusyMumof3, you now have a reasonably accurate picture of the values relative to one-another in the collection and it will provide a reasonable sound base from which you can proceed.

It comes as no surprise that the quoted values represent a fraction of the purchase price or valuation for insurance replacement values as Probate is the second or third lowest value that could be applied to the items (there are other types of values that are lower still, Valuation for Loan Security for example).

This jewellery valuation lark is not as straight forward as it first appears, is it?

The secret is to be totally open and explain in detail what purpose the valuation is to perform when asking someone for a valuation. Although, true professionals will ask sufficient questions to get to the bottom of that factor before proceeding.
The vast majority of problems I see, stem from a misunderstanding at the outset of the dialogue. It is not always the jeweller's fault, I have to say, some members of the public are inclined to think it clever to try and "outsmart" the valuer or withhold certain information. Open-ness is the key.

Yet again, I have rambled on a bit...... sorry.

Kind regards
Adrian

I understand it is in the OP's interest to have a 'low value' put on these items as they form part of her inheritance and therefore are liable to be taxed......but surely the valuation (for whatever reason can not be lower than the 'scrap value'). This is not my field but would like to understand.

Today, 20 years ago a website was quoting the scrap value of 9ct gold as £2.37 and the same website today is quoting it as £9.43 so the price of gold has gone up 3fold (approx) so why is the valuation only 25-40% of what she paid? Was the item very overpriced when she bought it or is the jeweller using something other than the scrap value as of today to value it?

Surely the lowest valuation it can have is scrap value?

gem_man

Hi Mrs Just_John

You are correct in saying that item's scrap value is pretty much as low as it gets (there are instances where the value can fall below a current scrap value, probate with a date of death of three years ago for example).

For the moment, let us accept that the scrap price is the lowest possible value.

I am not familiar with the nature of this lady's jewellery so cannot comment specifically on her jewellery but the scrap price for items has nothing to do with design, quality, workmanship or any other factors beyond the weight and type of metal.
A PRICE of a new piece of jewellery has more to do with design, quality, workmanship etc etc than anything else. Sure, the metal type and weight obviously plays a part but not a great deal (depending on the item of course). Most of the money you would pay for new jewellery would be for the stones, the time taken to manufacture, the costs involved in manufacture, shipping, sourcing and sorting gemstones, marketing, after sales service, the retailer's profit, the VAT etc etc etc. None of these elements have anything to do with the scrap selling price.

Couple of examples:
A raw blob of 100g grams of 18ct gold would sell for scrap at exactly the same price as a piece of 18ct gold Faberge selling for scrap.
A Ferrari could cost you £250,000. But if you scrapped it, you would get the same as a Ford assuming the metal mix and weight were the same.
Ridiculous examples of course, but they illustrate the theory.

So, although gold spot prices have risen 3fold in the period you mention (your words) that is not enough to clear all the costs associated with producing and retailing a new item of jewellery.

As always, there are exceptions (I spend my life considering the exceptions ), for instance a 1ounce 9ct gold ingot pendant purchased in 1977 when they were all the rage probably would scrap for more than the original purchase price (not a researched statement) as since it is just a cast rectangular block the cost associated with making it were minimal so its retail price would represent a smaller multiplication of a scrap value than say a handmade filigree ring.

With me?

Kind regards
Adrian

Mrs_justjohn

Yes am with you now.

so if the OP has inheritated a machine made curb chain or a cast ingot then the chances are that she paid over the odds 20 years ago or it has been undervalued now? However if she inheritated a piece of (what I as a ignoramus call) fine jewellery then it may be corrcet?

Thanks for taking the time to explain :-)

gem_man

Mrs_justjohn wrote: »

so if the OP has inheritated a machine made curb chain or a cast ingot then the chances are that she paid over the odds 20 years ago or it has been undervalued now? However if she inheritated a piece of (what I as a ignoramus call) fine jewellery then it may be corrcet?

Hmm, you are getting there but you seem to have made a connection between a retail price for a new item and the scrap selling price, this thinking is not valid.

In the same way that if you and a friend were comparing the relative merits of two "little black dresses", one by Coco Chanel and the other by Marks and Spence, it would be inappropriate and invalid to use the price that a textile recycling business would pay for the cloth, as one of the criteria. So it is with jewellery too.

Just because a cast or machine made item sold 20 years ago doesn't sell at a higher value now for scrap, in no way means that it was over priced when sold or under "valued" for scrap today. The two concepts do not belong in the same sentence.

It is a bit like asking the marital status of a garden gate (ok, that was a bit extreme, but you get the gist?)

An interesting discussion, thank you for giving me the opportunity to give more detail.

Kind regards

Adrian

busymumof3

Thank you both gem_man and Mrs_justjohn for extending and expanding on the whole jewellery valuation issue. It is certainly a whole lot more complicated that we initially appreciated. It is very useful to gain more of an insight into the process although it is still fairly mystifying from a lay-person's standpoint.

For the moment we have a documented probate valuation from a long-established local Jewellers which was what we required. The second stage will be to discuss resetting two of the pieces - 7 diamonds. I like this idea as it combines a degree of maintaining the inheritance but hopefully means the new piece will actually be worn rather than gathering dust. To offset some of the cost of the resetting, there are various plain gold items that we intend to offer the Jeweller in return for a credit - thank you gem_man!

That still leaves 3 pieces of stone-set jewellery which we have to decide how to sell. The probate value of these is only around £250. Given that these pieces cost in excess of £1000 I wondered what the advice would be about how to sell them for the maximum amount. Would an auction (with perhaps the probate value + an amount to cover selling fees as a sensible reserve) be the way to go?

We are not in a particular rush so can afford to look at the various options.

Again many thanks for the expert advice.