So you have jewelry at your disposal that you would like to appraise for it. There are various types of appraisal you can choose to find the value of your jewelry. Each appraisal has its own specific purpose to use and depending on your demand you can choose. In this article, we will go through what jewelry appraisal actually means and look closely at what fair market value appraisal does and what is the purpose behind it.
What Does Jewelry Appraisal Mean?
An appraisal of jewelry is the process by which a qualified jeweler evaluates an item of jewelry, such as a ring, necklace, bracelet, watch, or diamond, to determine its monetary worth for the purposes of insurance or taxes.
Appraisals of jewelry may include the weight of the metal as well as the attributes of any diamonds in your item (including cut, color, clarity, and carat weight), but these evaluations are merely the opinion of one jeweler and not a gemologist. Therefore, assessments may often differ from one jeweler to the next.
You may have an appraisal done at almost any jewelry shop, or you can pick someone who specializes in appraisals, such as a gemologist or appraiser. You also have the option to do it yourself. Depending on the item, appraisals often cost approximately one hundred dollars (but some jewelers charge by the hour, so make sure you inquire!).
It is essential to keep in mind that appraisals, despite the fact that they are useful documents for reasons such as taxation or insurance, sometimes exaggerate both the attributes of the object in question and the price. Why? You will be better protected in the event that your diamond is ever lost or stolen if you get insurance and pay a premium.
They show what most likely was the initial purchase price of your jewelry, but they do not reflect the worth of the item in its current condition. Therefore, if your intention is to resell your jewelry, receiving an evaluation for it may provide you with incorrect information.
What Does Fair Market Value Appraisal Mean?
Evaluations of an item’s fair market value assess the price that a piece of jewelry would obtain if sold in a certain market. These appraisals are often utilized in the process of dividing the assets of an estate or settling divorce cases.
A property’s fair market value is the price “that would be agreed on between a willing buyer and a willing seller in the appropriate market, with neither being required to act, and both having reasonable knowledge of the relevant facts,” according to the definition provided by the United States Department of Justice.
That formal definition is a little bit confusing, but in general, each and every piece of jewelry “belongs” to a certain market. For instance, the value of a generic pair of little diamond stud earrings should not be predicated on its potential in the realm of high-end auctions, even if the pair is of exceptional quality. In a similar case, an uncommon specimen of raw emerald crystal shouldn’t even be considered for sale on the market for scrap gold.
A fair market value appraisal of a piece of jewelry is the same as an appraisal of any other asset (real estate, vehicle, etc.), as stated by the Internal Revenue Service and the United States Department of Treasury.
A fair market value appraisal is a reasonable sum that you can expect to fetch if you sell your jewelry on the open market. A diamond engagement ring that was just acquired is considered to have a fair market value if its current retail market value is taken into consideration. This value does not take into account the resale, wholesale, or used jewelry markets in any way.
How Fair Market Value Appraisal is Executed?
It is the responsibility of the professional appraiser to collect all of the important information on the jewelry item in question as well as the market as a whole. The most current prices for gold and gemstones, as well as the geographic area of the hypothetical sale, are additional factors that the appraiser has to take into account.
The formal document that sets out the item description, the decided value, and the supporting documentation for the assessment is something that the appraiser is responsible for preparing for both types of appraisals.
You can understand how much time is required to complete the appraisal procedure for a huge estate’s worth of jewelry if you consider the fact that the process for appraising a single piece of jewelry may take quite some time. Because of this, professional appraisers get proper compensation for the job that they do and the reports that they provide for their customers.
Purpose of Having Fair Market Value Appraisal
An appraisal of the item’s fair market value is most often required for reasons relating to taxes and estates when the item in question is jewelry that the owner wishes to sell.
The estimation of the probable selling price of a piece of jewelry is provided by its fair market value. This price is based on the assumption that the jewelry will be sold in its present state and in its most common market.
The price at which an item is sold at a local auction, on Craigslist, or at any other place where it is offered for sale is an indication of the item’s fair market value. This price is almost never the entire retail price of the item.
It is possible for the “scrap” worth of an object to be greater than its “fair market value,” however this is very dependent on the state of the item and how desirable it is. That is the amount of money that was spent only on the precious metal content.
So using the fair market value appraisal has its specific reasons and only if it fits your agenda, you can opt for this option.