Getting in the ballpark

Many appraisal organizations forbid verbal appraisals; USPAP does not, but imposes the same standards for developing and reporting an appraisal whether it is presented in written or verbal form. Clients trying to sell their jewellery sometimes only need a range of values to establish their ‘asking price’ and ‘firm price.’ My clients often refer to this as ‘a ballpark value.’

I call it a “Limited, Restricted Use Resale Valuation.” For any appraiser to adequately provide a credible value, it is necessary to properly evaluate the property’s physical and non-physical attributes and to determine the ‘apposite’ market. In other words, we have to know what’s there and which is the most common market for resale. For this type of ‘value range’ appraisal, it may be appropriate to do less extensive market research, broaden the comparables, and provide less descriptive documentation, depending on the client’s needs. I prominently declare this type of report a “limited, restricted use” appraisal, with potential third parties specifically advised that they should not rely on it. These valuations are limited in scope and restricted to the client’s exclusive use. We need to clearly explain their shortcomings to our client and in the written report, when one is provided.

If the seller’s intentions and the potential value of the property warrant it, I may suggest a ‘resale market value’ appraisal to the client. Normally, these take the form of a summary type of report, but in the case of high-value items, I’ve found a ‘self-contained’ format offers both the buyer and seller a more complete understanding of my value opinion. This may result in a higher realized price and less haggling in the process. Unlike an insurance appraisal in which the third parties will never actually see the jewellery, we may assume our report will be used by the buyer as a means to identify the object they are examining. To that end, it’s important to include any specific information that might be useful to an untrained observer without access to magnification or precision instruments. Multiple photos are often most useful for identification, especially when they include extreme close-ups of significant details.

Be gentle

The reasons people sell their jewellery can be just as varied as the jewellery itself. Clients seek us because we are the jewellery experts—we need to become people experts as well. Recognizing the emotional and sometimes irrational value people place on their jewellery can help us develop a gentle bedside manner with carefully chosen words that soften the blow to their egos. If we create a range of appraisal products to fit their needs while remaining true to our professional obligations, our practices and our reputations can benefit.

Mark T. Cartwright, ISA CAPP, ICGA, CSM-NAJA, GG (GIA) is president of The Gem Lab, I.C.G.A., an independent American Gem Society (AGS)-accredited gem laboratory. He has been a jewellery designer, goldsmith, gemmologist, and appraiser for more than a quarter century. Cartwright can be contacted via e-mail at gemlab@cox-internet.com.