So here I am watching Gem TV and seeing all of the super great deals like a 5 carat ruby that has an appraised value of $800 but is being sold RIGHT NOW for an amazing $399.99. Everything they sell goes for hundreds below the appraised value.
I’ve seen this elsewhere too. Print ads for major department store showing rings on sale for $1000 but they are “guaranteed to appraise for double” or some such.
Clearly the appraised value is not the actual cash value of the stone, otherwise they should be able to sell it for that much. Nor could I take my $399 bargain buy from Gem TV and sell it to my neighbor for its appraised value of $800 because he can get it from Gem TV for $399 just like I did.
An appraised value doesn’t mean anything unless it comes with a guarantee from the appraiser to buy it for that price. The appraiser who came up with that $800 value probably works for GemTV, and doesn’t buy anything from anyone.
A real appraisal is useful for insurance. For jewelry, it’s the cost to replicate the item from scratch. When it was originally made, it was mass produced, and the materials were bought in bulk. Paying a jeweler to remake the piece would cost much more.
I actually heard an appraiser on one of those shopping channels say he doubles the purchase price for an appraisal. I don’t know if that’s just him, or a standard proceedure.
Most types of goods have two possible appraisal prices: what you could expect to buy it for and what you could expect to sell it for (with the latter often being well below the former). An appraiser needs to make it clear which of these two prices he is giving.