Below is a list of the different Types of Values considered when appraising jewelry, depending on the Scope of Work.
REPLACEMENT VALUE (NEW)
The cost to replace a property with an equivalent, or substitute which is new, using modern materials, techniques and standards that satisfy the the description of use of the replaced property. It is the present cost of replacing the property with one having the same quality and utility, but in new condition.
Used For: • Obtaining Insurance (Modern Jewelry)
COMPARABLE REPLACEMENT VALUE (SECONDARY MARKET)
The approximate cost to replace an item with an item of like kind, quality, and condition through a secondary market such as an antique store or estate dealer, neither new nor an exact duplicate.
Used For: • Obtaining Insurance Coverage (Vintage & Antique Jewelry)
The current price of constructing an exact duplicate of the item. This is the same as Replacement Value (New), except that the item must be individually duplicated as identical replacements are not available in the market.
It is unusual to use this level of Replacement Value, as it is often much higher than other methods and must be fully understood by the client. The insurance company may not even offer such coverage. This value is not to be used casually.
FAIR MARKET VALUE
The price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of the relevant facts. (The appraisal is not an offer to buy.)
Used For: • Divorce Settlement • Estate Tax Liability • Estate Distribution • Charitable Donation
ORDERLY LIQUIDATION VALUE
The most probable price for which an item would change hands between knowledgeable buyers and sellers if sold in an orderly manner, properly advertised, allowing a reasonable amount of time to complete the transaction and in an appropriate marketplace. Examples include auction houses.
FORCED LIQUIDATION VALUE
The most probable price for which an item would change hands if sold immediately without regard to the most appropriate market. There is not enough time for adequate exposure to the market that is most likely to provide the highest monetary return and the property is being sold under compulsion, such as a court-ordered sale.