A diamond appraisal is the process of determining the value of a diamond, and it is an important step when selling diamonds or using them to guarantee an asset-backed loan. The process might initially seem cut-and-dry, but there are many important factors to consider. At Qollateral, we want our customers to take full advantage of their assets, so we’ve created a thorough diamond value guide to help you understand what to expect during the process before you sell or borrow against your valuable gemstones.

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Appraising a Diamond

There are many reasons why someone might need to appraise a diamond, whether for inheritance or insurance purposes or to create instant cash flow by selling them or using them as a guarantee for a loan. Furthermore, the diamond value will vary depending on why someone needs the appraisal in the first place. For example, insurance companies might only need the asset's retail value, while the diamond's current market value is more beneficial for someone interested in selling. For the sake of this guide, we will focus on the latter and what to expect during an appraisal when selling or borrowing against diamonds.

Why is a Diamond Appraisal Important?

The goal of an appraisal is to assess the diamond’s value based mainly on market trends. As a result, knowing the diamond value ultimately ensures a higher offer when it comes time to monetize the asset. Reputable firms, including Qollateral, will always appraise diamonds beforehand to guarantee the highest loan amount. However, skipping this step in any other situation can mean a significant loss for the owner when it comes time to sell. An appraisal from a trusted source is key to getting the most value from your diamonds.

When Do I Need a Diamond Appraisal?

There are many reasons why appraising a diamond might be necessary. One of the most common is to sell it for the highest amount or use it to secure a substantial loan. If you aren’t selling or borrowing against your gems, you might require an appraisal to insure against theft or an unexpected catastrophic event. Or, perhaps you need a total valuation of your assets for tax or inheritance purposes. Whatever the reason, an appraisal should be completed before entering into any kind of commitment to protect your own interests.

What Happens During the Appraisal Process?

The art of how to appraise a diamond is complicated and requires the finesse of an experienced appraiser or gemologist. Additionally, appraisers will approach loose diamonds differently than engagement or diamond rings. For example, in addition to determining the stone’s value, they will also consider which company made the ring, its condition, what material the band or setting is made from, and what year the ring was produced.

During the evaluation, a qualified appraiser will carefully examine the diamond to determine its value based on what is commonly referred to in the industry as the 4 Cs: Cut, Clarity, Color, and Carat.

Cut: Raw diamonds are often opaque and appear dull. By cutting the diamond, the stone takes on the brilliant, glittering appearance required for jewelry. The diamond cut refers directly to how the stone has been faceted to create its desirable sparkle, which can vary in type, such as Princess cut, Asscher cut, and Cushion cut. Diamond cuts are graded from excellent to poor, depending on how well the stone reflects light. Alternatively, the shape of the diamond refers to the shape of the stone itself, such as square or oval, and isn’t necessarily the same as the cut.

Clarity: Diamond clarity distinguishes how pure the stone is and the presence, or lack thereof, of surface defects or inclusions, aka internal flaws. The scale ranges from flawless to imperfect, with several degrees in between to measure how included or blemished the diamond is.

Color: Chemically pure diamonds are, by nature, transparent. Because they are a hallmark of purity, transparent diamonds are valued more highly. During an evaluation, an appraiser with a skilled eye will use the GIA D-to-Z color-grading system to establish the stone’s color and value.

Carat: “Carat” is the term used to describe the weight of the diamond. One carat is equivalent to 0.200 grams, or 0.007 ounces.

Once the diamond’s value has been established, the appraiser will consider several other factors, such as how much similar diamonds are trading hands for and historical pricing data.

How Much Does an Appraisal Cost?

If all you seek is an appraisal, some companies charge upwards of $150 for the service. However, all appraisals done through Qollateral before entering into a sale or loan agreement are complementary and entirely obligation-free. Should you choose to keep your diamond assets, we will honor your decision, no questions asked.

I’ve decided I Want to Sell or Borrow Against My Diamonds – Now What?

Once you’ve chosen to monetize your diamond assets, the next step is to find a reputable buyer or lending firm to perform the appraisal. They will then prepare a fair offer, followed by immediate payment. If you decide to retain ownership of your diamonds and commit to a loan instead, they will be stored in a high-tech vault and returned to you once the loan has been repaid.

Selling or loaning against diamonds is a smart and efficient way to create instant liquidity. Knowing what to expect from the appraisal process before you commit ensures the highest offer possible. Qollateral is available to help you through the process with the best offers on the market and a team of knowledgeable appraisers with decades of combined experience in the field. Based in New York City’s International Gem Tower, Qollateral is also one of the country's safest and most reliable lending firms.

Contact Qollateral today to book your free, no-obligation appointment:

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