What is the Appraisal Procedure?

This is what you will see on our appraisals.

I. LIQUIDATION REPORTS:
A. EVALUATION PROCEDURES -- All evaluations of gemstones are formulated in alliance with weight, shape, variety and average market prices from source liquidators. Since variations of supply and demand of precious gems occur periodically and interrupt the regular market, differences in liquidation value are likely to exist. It is our ardent endeavor to verify current fair market value from major and regional auctions and jewelers who trade in estate jewelry. Obsolete (poor condition and/or fabrication) jewelry is stated, and the evaluation will only express an opinion on its current liquid worth. Antique (100 or more years), period and/or estate (previously owned) jewelry is evaluated using as many methods and research as possible for liquidation evaluation. Antique, heirloom and collectible jewelry is usually valued using the market data comparison approach. Prevailing liquidation values are based on these universally practiced and accepted processes by the gem and jewelry trade. Examples of comparison are the JPR for antique and period jewelry and estate jewelry auction results.
B. MARKETS
1. CASH LIQUIDATION -- Represents the gem or jewelry being sold to a dealer, wholesaler, competitive second hand dealer, jeweler, pawn shop or other consequential buyer of second market gems or jewelry within one business day.
2. AVERAGE AUCTION LIQUIDATION -- Represents auction retail less the sellers commission and the buyers premium, both paid to the auction house. The subsequent amount is the consignor's net remuneration less the illustration fees.
3. AVERAGE AUCTION RETAIL -- Represents the average sales prices realized at major auction (including the buyers premium) meeting the fair market value criteria. This is the highest and best use for provable sales of second market jewelry. This is also the primary market we look to for fair market value described as 'comparable/comparative' sales.
4. RETAIL MERCHANT -- This market is generally infeasible to monitor.
C. EXAMPLES OF PURPOSE
1. ESTATE PROBATE -- Fair Market Value (FMV) is defined as 'the most probable price in cash, or in other precisely revealed terms, for which the appraised property will sell in a competitive market under all conditions requisite to fair sale, with the buyer and the seller each acting prudently, knowledgeable, and for self-interest, and assuming that neither is under undue duress'. Implicit in this definition is the presumed consummation of the sale at a specified date and the passing of title from seller to buyer under conditions whereby:
a. The buyer and the seller are typically motivated. b. Both parties are well informed, and/or advised, each acting in what he or she considers his or her own best interest. c. A reasonable time has been allowed for exposure to the open market. d. Payment is made in cash or its equivalent. e. The price represents a normal consideration for the property sold unaffected by special financing amounts and/or terms, services, fees, costs or credits incurred in the transaction.
2. INVESTMENT -- Usually represents the market for quick cash liquidation.
3. COLLATERAL -- Usually represents the market for quick cash liquidation.
4. DIVORCE -- Varies by state law or participants. Usually fair market value.
5. RE-SALE -- Can be any of the above markets depending on time and effort. See FMV under estate probate.
6. CHARITABLE CONTRIBUTION -- Usually fair market value. See estate probate.7. LOST ITEM (HYPOTHETICAL FOR INCOME TAX LOSS) -- Fair market value.

II. WHOLESALE REPORT:
EVALUATION PROCEDURES -- Evaluations of gemstones are formulated in alliance with weight, shape, variety and average cash prices - from current market prices and source suppliers, dealer to jeweler, information available through the 'Diamond Market Monitor' published by the Gemological Appraisal Association and 'The Guide' published by GemWorld International. Since great variations of supply and demand of precious gems occur periodically and interrupt the regular market, sharp differences in dealer cost are likely to exist. It is our ardent endeavor to verify current wholesale prices from those manufacturers who properly trademark their creations. Where that information cannot be obtained, every effort is made to establish a fair and accurate wholesale dealer value of similar merchandise. The average market wholesale dealer value attempts to reflect the price at which wholesale dealers will sell an item to a retail dealer. Obsolete (poor condition and/or fabrication) jewelry is stated, and the evaluation will only express an opinion on its current liquid worth. Antique (100 or more years), period and/or estate (previously owned) jewelry is evaluated using as many methods and research as possible for wholesale dealer value. Antique, heirloom and collectible jewelry is usually valued using the market data comparison approach.
A. MARKETS -- AVERAGE MARKET WHOLESALE DEALER VALUE -- Represents the price at which wholesale dealers will sell an item to a retail dealer.
B. EXAMPLES OF PURPOSE
1. RETAIL DEALER KNOWLEDGE -- Represents the information sought by a retail dealer wishing to know the average market wholesale dealer value. Usually this is when the retail dealer is seeking the wholesale because the jewelry item is a second hand item.
2. OTHER THAN RETAIL DEALER KNOWLEDGE -- Represents the information sought by others to verify the average market wholesale dealer value.

III. RETAIL REPORTS:
EVALUATION PROCEDURES -- Evaluations of gemstones are formulated in alliance with weight, shape, variety and market prices from source suppliers. Prices for a range of sizes and quality combinations are regularly checked and updated through source suppliers, 'The Diamond Market Monitor' published by the Gemological Appraisal Association and 'The Guide' published by GemWorld International. Since great variations of supply and demand of precious gems occur periodically and interrupt the regular market, sharp differences in dealer cost are likely to exist. It is our ardent endeavor to verify current replacement prices from those manufacturers who properly trademark their creations. Where that information cannot be obtained, every effort is made to establish a fair and accurate replacement value of similar merchandise. Since honorable retail mark-ups range at heterogeneous percentages over costs, it is difficult to develop a prevalent retail price. However, the average approximate retail replacement value attempts to mirror an average of a broad range of retail dealers and merchants offering similar jewelry to consumers in the closest geographic market to the origin of this appraisal OR through Mackley & Company, Inc. if necessary, for the intended use of obtaining insurance. Obsolete (poor condition and/or fabrication) jewelry is not regarded as replaceable and the evaluation will only express an opinion on its current liquid worth. Antique (100 or more years), period and/or estate (previously owned) jewelry is evaluated using as many methods and research as possible for replacement with like or similar quality. Antique, heirloom and collectible jewelry is usually valued using the market data comparison approach. Quotations are based upon current market values and are subject to oscillations. Mark-up of a similar or exact duplicate of the item being appraised is applied to the actual dealer's, cutter's, or manufacturer's selling price to a retail jeweler.
A. MARKETS
1. LOW RETAIL -- Represents the cash price retail brokers, jewelers, 'wholesalers selling to the public,' and other retailers in highly competitive markets, will sell gems and jewelry items.
2. ACTUAL RETAIL REPLACEMENT -- Represents the most common price charged for the item by the seller/appraiser. This market cannot be used by an appraiser that is not engaged in buying or selling.
3. AVERAGE RETAIL REPLACEMENT -- Represents the representative retail value realized for new merchandise. This mark-up varies according to the cost. Usually the lower the cost to the jeweler, the higher the mark-up and visa-versa.
4. HIGH RETAIL -- Represents the highest standard for some retail jewelers in areas of weak competition or chain-operated jewelry stores that cannot bargain a price with the customer or other sellers of gems and jewelry. Although some stores have been known to charge even higher mark-ups, often the basic principles of fair-market do not apply. This category should be used for 'one of a kind' and/or 'art jewelry'. Moreover, this category should not be applied as fair market value as it does not represent the highest valuation or put it to best use and fails to meet the image and definition of previously-owned jewelry and reasonable knowledge of relevant facts. All markets may include new to antique jewelry. For information regarding other examples of markets consult with Mackley & Company, Inc.
B. EXAMPLES OF PURPOSE
1. INSURANCE or LOSS SETTLEMENT -- There are basically two types of policies for insurance, the replacement value or the agreed value policy.
2. RETAIL REPLACEMENT -- For the purpose of knowing the current price an article of personal property can be replaced. The anticipated method of replacement could be: 1) a new item of like kind; 2) a similar previously owned item; 3) an identical item from the original manufacturer if noted as copyrighted; or by reproduction, if not; 4) the cost to repair, if damaged; 5) any limit of liability described in the policy; or 6) the limit of liability applicable to the property. The purpose of having gems or jewelry insured usually is for replacement or actual cash value (ACV). Insurance policies commonly include coverage for jewelry with the value included up to a certain limit. Some policies restrict jewelry coverage for theft, burglary, or robbery to a total aggregate dollar amount, with few companies providing coverage for more. Such insurance usually will not cover the property owner for the full loss of an item. In order to procure coverage for the full value of the item(s), an appraisal for each item will be essential and the article and a replacement value on each item. For full and just value coverage scheduled on your policy one must have a detailed description of the article by a certified (gemologist & appraiser), and a replacement value on each item . . . this is paramount. Most insurance policies contain a clause which permits the company to replace the jewelry in like kind with a comparable replacement rather than make cash payment for the loss. If so, use your appraisal to substantiate that the quality of the replacement is similar to the lost item. Periodic updated reports is recommended.
1. AGREED OR FULL VALUE -- It is just as the name implies. The value is agreed upon when the policy is taken. When a loss happens, the previously agreed value becomes the cash settlement amount for the claim.
2. HYPOTHETICAL -- For damage or lost item liability. The appraiser has not seen the merchandise.
3. COMPARISON -- For the purpose of verification of the identity and/or quality as claimed by the seller. Usually this reflects the most aggregated retail replacement price.
4. DAMAGE REPORT -- For the purpose of showing monetary loss through damage. Usually for a claim.

IV. MULTIPLE REPORTS:
Each party requesting appraisal service has been questioned as to the type of appraisal and for what purpose or function. Where in the opinion of Mackley & Company, Inc., there exists confusion or overlapping types and/or functions, different reports will be provided and discussed in detail.V. APPROACH-MARKET DATA vs COST BASE The preferred method for rendition of value is the market data approach. Authentic value is based on actual transactions, however, when market data through the research of Mackley & Company, Inc., is not available the cost base will be utilized.