As you begin your diamond research, you may come across the terms ‘diamond appraisal’ and ‘diamond certificate’. It is important to know the difference between the two and understand the role they play when buying or selling a stone.
What is the difference between a diamond appraisal and a diamond certificate?
A diamond appraisal is issued by a jeweler or gemologist and allocates an estimated monetary value to your stone. This is based on the characteristics of your stone and the current diamond market. Two important things to keep in mind:
- The diamond market is volatile. Meaning that an appraisal value from ten years ago is not representative of what it is worth today.
- Appraisal values tend to be heavily inflated.
A diamond certificate (also known as a diamond grading report) is issued by a gemological laboratory and contains specific information about the characteristics of your stone. This includes carat weight, color, cut and clarity grade. It will not give an estimate of the diamond’s value but will give an objective assessment on the quality of the diamond.
Which is better?
While appraisals are useful, they are primarily issued for insurance purposes. The issue is that insurance companies charge high premiums on higher value items, which explains why appraisals are typically inflated 100% above retail value. Therefore the value on an appraisal is in no way indicative of what it would be worth on the second hand market. This also helps the jeweler make a sale as it makes the diamond seem more valuable. Additionally, any specifics about the quality of your stone are only ever the opinion of a jeweler, which a laboratory may disagree with.
A diamond certificate is much more reliable, as it details the exact qualities of your stone without estimating a value that can often times be misleading. The grading’s are done by an independent gemological laboratory, which as long as you choose a reputable lab such as the GIA, will be more accurate and reliable.
The bottom line is, that while having any documentation on a stone is better than none, a certificate is more representative of your diamond and its worth.
Will a diamond buyer honor my appraisal value?
Due to the nature of appraisal values and a diamonds’ value on the second hand market, a diamond buyer will not pay the appraisal value. The reality is that there is a big discrepancy between the two:
- Appraisal values are often 100% above retail value
- Diamonds on the second hand market are worth 20%-40% of retail value