High appraisal, is it the truth?

[Quinn]

The appraisals that a jeweler gives you when you buy an item from them, are they reliable? I find it odd when they will sell an item for x amount of dollars yet give you a paper saying its worth so much more. If this were true, why are they selling it so low?

[hotdiamonddeals]

Good question.
You should get a lot of responses on this. It is a much discussed question in the trade. And I'm happy to give you my opinion, Which by the way is all an appraisal is. And valuation is based on what someone appraises an item for.
The appraisal should be for the replacement value of the item being appraised. Or to say it another way, what can the item be replaced for in your market.
So it is not an offer to buy, but the argument is why can't you sell the item for the appraised value? Because as a jeweler, I can pick up the phone and buy it wholesale any day of the week. And sometimes I can even buy it for LESS than wholesale. But the one thing that is constant is that there WILL be a mark up so that I may provide for my family.
You ask specifically why the appraisal doesn't match the buying price. It should. Although some shops add 10% for inflation. Maybe an appraisal from an independent appraiser will put you at ease.

[Bearman]

The appraisals that a jeweler gives you when you buy an item from them, are they reliable? I find it odd when they will sell an item for x amount of dollars yet give you a paper saying its worth so much more. If this were true, why are they selling it so low?

Here's my take on appraisals.

You have the good ones that appraise the item for approximately what it would cost to replace for the next couple of years. You don't need to come back every 3 months to have it updated.

The one many people get is what I call a feel good appraisal, not worth the paper it is written on.
You see a piece of jewelry for $8000, but you get in on "sale" for $3500. You get an appraisal for $8000 to make you "feel" you got such a great deal, hence "feel good" appraisal.

These appraisals are over-inflated to match the store's high markup.

[denverappraiser]

Value of jewelry is not a fixed figure. It will vary depending on your marketplace and the situation. The price that you would reasonably expect a jewelry store to charge you for an item is not the same as the price you should expect a pawn shop to pay you for it although both of these numbers could be described as the ?value?. For a report to be useful, it?s important to know what the appraiser means and how they came to their conclusions. This should be clearly stated in the report itself. They are not all the same, even for the same item and even from the same appraiser.

In the case of appraisals where they report a figure that clearly conflicts with known facts (like an actual sale for a substantially different price), they are usually describing a theoretical marketplace in a store that doesn?t actually exist. This imaginary store can charge whatever they choose and they don?t need to actually make any sales at this price since there may be no market pressures at play in that particular parallel universe.

I can?t think of very many situations where this would be useful information but, fortunately, this sort of appraising is easy to do and therefore generally very inexpensive. It?s not even necessary to actually examine the piece. Many stores are happy to include one free with your purchase, sort of like the gift-wrapping.