Managing Your Jewelry Assets
Many people watch the “Antiques Road Show” and ponder a precious find in their garage or attic. Experience has shown, they might not have to go that far.
That box of accumulated personal and inherited jewelry items on the dresser may hold more value than its owner realizes. Personal property in the form of jewelry can represent a substantial portion of a person ’s net worth. Yet, it is often their poorest managed asset. Frequently, valuable jewelry items are sold for a fraction of what an informed owner could have derived from them.
Assess Your Collection
Whether your ultimate goal is to have a fine jewelry collection or convert your jewelry into cash, you need to take stock of what you have, eliminate unwanted items and secure the remainder. As with most projects, organization, information and expert assistance are keys to success.
The best place to start is to gather all jewelry articles (including broken items), watches, beads, etc. into one place. Next, carefully sort through the assortment and separate out broken and unwanted items from the “keepers.” The broken and unwanted group can then be sub-divided into two groups: one that has tiny or no gemstones and one with stones (including cameos). Set the group of stone set items aside for the appraisal consultation session described below.
One Man’s Junk …
The group of broken and unwanted items without stones should be taken to a reputable metals or coin dealer.Your goal is to sell them for their scrap value. Most coin dealers will pay a high percentage of “melt value ”for your jewelry metals.To know in advance exactly what your gold is worth see the graphic, “How Much is Your Gold Worth?” The coin dealer will extract the precious metals. If he is an established dealer can be trusted to do this. Bear in mind though, that even though the coin dealer will give you a fair price, it will be far less than the value of the items as finished jewelry, so you may want to first search for tiny treasures for nieces, nephews, grandchildren and special friends.
Expert Advice, a Good Investment
For the rest of the jewelry items, your next step is to find and employ the services of an appraiser. Of paramount importance is to find an independent, qualified and certified appraiser. Gemologists have excellent training and are highly skilled in dealing with gemstones and most jewelry.
For this task, however, you might need to consider an appraiser familiar with antique jewelry, precious metals and watches as well.The appraiser must be skilled in valuation techniques. Let the buyer beware: Many states have no laws governing the skill requirementsof appraisers. The American Society of Appraisers (www.appraisers.org) has certified members available who meet strict training and experience criteria.You want an ASA who holds credentials in Gems and Jewelry. Don ’t hesitate to ask questions when you call such as suggested scrap metal buyers in the area. The more information you arm yourself with the better. Shopping for the best price for an appraisal can only be done after you have narrowed your search to equally qualified people. Many appraisers offer their services on an hourly basis.Compare rates and consider specific quotations if a large number of items are involved.Never engage an appraiser who charges a percentage commission (it is unethical).
The Appraisal Session
The appraisal session can provide a wealth of anecdotal information about your personal and family jewelry in addition to the appraisal valuation itself.Most appraisers welcome your presence and will comment on your items as they work. Diamond cutting styles, for example, can “date” diamonds and some of your curiosity about heirlooms might be satisfied.
This is what you should aim to accomplish in your session:
Define what type of appraisal best suits your needs.The three most common are:
- Replacement (insurance)
- Fair Market (divorce and estate)
- Liquidation (cash value)
Important: If any of your jewelry is involved in estate probate or divorce litigation, check with your lawyer before visiting the appraiser.
Determine the appraisal report format. You might find it useful to have items to be sold on separate appraisal documents.
Identify items in the group that are good, but you know you won’t be wearing them.These items are best sold or kept in safekeeping (read: safety deposit box) and not insured.Ask the appraiser to check the condition of items and recommend repairs.
Allow sufficient time for the appraiser to examine items of unknown value such as old watches. Once you have a thorough understanding of the value of your jewelry, you will need to decide what you want to keep and what you want to sell.
Selling Your Unwanted Jewelry
Local newspapers, bulletin boards, online auctions and word-of-mouth are all resources to consider when planning a selling strategy. Frequently a jewelry owner will seek offers from businesses advertising as “cash buyers ”or “ cash for your jewelry.” These are businesses that profit by their ability to pay cash “on the spot.”
Convenient and serving a purpose but costly if you are seeking maximum return. The uninformed seller, armed with a preconception of what he will get based on his insurance appraisal, will inevitably be shocked by cash offers and convinced he is being cheated. The problem is that his expectations were based on an inappropriate type of appraisal for his needs. Additionally, he selected the one type of sale (cash on the spot) that returns the least. The informed seller realizes that the insurance appraisal assumes replacement via normal retail methods of sale for the item in the insured’s area.
Had the seller gotten a cash liquidation value appraisal, the offered amount from a cash buyer would have looked remarkably comparable. Had it been a Fair Market Value appraisal the seller would have gotten an estimate at or near the amount that could be realized from a private sale. The Fair Market Value is determined by what one should be able to buy or sell in a person-to-person sale such as those in the local newspaper.There are many appraisal types. A competent appraiser (or lawyer in legal matters) will help you find the right appraisal for your intended use. Private sales are frequently based upon an existing retail replacement (insurance) appraisal.There is nothing wrong with this practice as long as buyer and seller are aware of what the appraisal means. When the parties are informed, the private to private sale can be a win-win situation.
Securing Your Jewelry
Once you have appraised your collection, you will probably be more apt to acknowledge your collection as an asset and want to manage it prudently. Would you walk out of your house and leave $5000.00 in cash on the kitchen counter? Most responsible people will answer “No,” yet many of these same people would leave a diamond with a fair market value of $5000.00 (or more) unattended.The small size of jewelry articles causes us to sometimes lose sight of their great value. Valuable jewelry that you wear must be insured. What constitutes “valuable” is best be determined by the terms of your policy and consultation with your agent. Jewelry that is not worn but is exposed to loss should be secured in a safety deposit box.
Here’s to you being delighted with finding a precious treasure or two among your collection.