Episode 194
What you’ll learn in this episode:
- How the internet has changed the way people research and shop for jewelry
- Why even antique jewelry should be appraised with today’s market in mind
- Why lab-grown diamonds are becoming increasingly popular, even if they aren’t necessarily a good financial investment
- How to tell if you’re working with a qualified appraiser, and what techniques they use to determine a piece’s value
- Ed’s advice for purchasing jewelry at auction, online and while traveling
About Ed Lewand:
Edward A. Lewand, GG, ASA, AAA, is a professional, independent appraiser of fine and antique jewelry. He has earned a Graduate Gemologist degree from the Gemological Institute of America, is a Certified Member of the Appraisers Association of America and a Senior Accredit Member in Gems and Jewelry from the American Society of Appraisers.
Mr. Lewand also teaches a course that he developed on appraising jewelry called the Art of Appraising Jewelry at the NYU School of Continuing and Professional Studies. He lectures on appraising and antique jewelry. He maintains his insurance brokerage license in P&C and has a certificate in Paralegal studies from Adelphi University.
He specializes in antique jewelry appraisals and works with attorneys on estates, trusts, insurance matters, and copyright issues as well as appraisal theories and concepts. He is also an outside expert for the IRS and consults with numerous galleries and dealers in New York on antique jewelry.
Mr. Lewand is also the director of Jewelry Camp (JewelryCamp.org), now in its 43rd year, held at PHILLIPS Auction House in New York, an international conference on antique jewelry and art pertaining to jewelry.
He does work for international accounting firms as well as appraisals for the sale of major companies.
Additional Resources:
Transcript:
A good jewelry appraiser can give you much more than just an estimate of what your jewelry is worth. As a professional, independent appraiser of fine and antique jewelry, Ed Lewand draws on his historical knowledge of jewelry and his connections in the industry to give his clients a deeper understanding of what they have in their collections. He joined the Jewelry Journey Podcast to talk about how to know you’re working with a qualified appraiser; why less expensive jewelry, like lab-grown diamonds and art jewelry, is on the rise; and why you should always read the fine print when making a purchase. Read the episode transcript here.
Sharon: Hello, everyone. Welcome to the Jewelry Journey Podcast. This is the first part of a two-part episode. Please make sure you subscribe so you can hear part two as soon as it’s released later this week.
Welcome back to the Jewelry Journey everybody. We’ve had about a month-long spring break. It’s really good to be here again. Even though I missed all of you, I’m always hearing your suggestions. I also want to know who you want to hear, the speakers that would be of interest to you or whatever ideas you have. Please write me at Sharon@ArtsandJewelry.com, or you can send your ideas to me via Instagram @Arts and Jewelry.
Today, our guest is Ed Lewand, who was one of our first podcast guests several years ago. He’s a professional independent appraiser, and he’s had a lot of experience. He’s worked for banks. He’s worked for all the big houses. He’s travelled, I would say the world, but I know he’s gone to New York. Today he’s going to be talking about the importance of appraising. I think that’s something we all want to hear about. I know it’s so important; especially living in California, you have wildfires when you wake up in the morning or you have a mudslide in the backyard. Whether it’s fire, theft or something else, appraising is important, especially when you have to prove to somebody else what something is worth.
Ed is also the director of what is colloquially known as Jewelry Camp. The Antique Jewelry and Art Conference is its real name, but it’s known as Jewelry Camp. It’s really where I got my start. I learned very quickly that I could sit through a whole day of jewelry-related meetings and not even think about the time, but if it was anything else, if it was work-related, I didn’t have the patience. It really helped point me toward what I liked and what I thought I should like, but I found out I really didn’t like. So, I have homed in on jewelry. Without further ado, I’d like to welcome Ed to the program.
Ed: Thank you, Sharon. How are you doing?
Sharon: I’m doing O.K. It’s good to have you since you were one of our first ones. One thing I wondered is how you kept your business going through Covid.
Ed: That’s very interesting. One, I still flew, believe it or not. I got on planes and flew. Yes, you wore a mask, and yes, you sat in alternating rows and everything else like that. Not many people were traveling. New York, where I had an office—I still do; I share an office now—was on lockdown, but essential businesses were still allowed to operate and see people. Guess what? Appraising fell under banking and accounting. So, I was still able to see people. We did a lot of Zoom work for the accounting firms and banks. Of course, that was mainly verifying investments. As long as I saw the piece, I was O.K. with figuring out what was needed for that particular assignment. It wasn’t that bad. I didn’t see a lot of private people like I normally do, but I was still doing work for the companies.
Sharon: When you were traveling, it was a lot easier I suppose.
Ed: It wasn’t crowded. I had to go to Florida for a client and see my sister. That was the first time I was ever on Delta Airlines, in the terminal in Orlando, and I was the only person there. There was nobody else there. I was like, “Whoa, this is like the Twilight Zone. Orlando, Delta Terminal, no one there.” Four or five other people finally trickled through, but I was still able to do stuff remotely for people. One of the weird things was if I was going live in person, I carried a UV lamp with me to scan everything. Supposedly the UV light was killing the Coronavirus. So, I would scan everything before I touched it, and I would scan it again before I gave it back. I would tell people, “I can’t wear a mask while I’m working, looking in a microscope with a mask on.” I just couldn’t do it, and nobody had a problem with that. So, business still went on; it was at a different level or a different procedure.
Sharon: I’m really surprised to hear that appraising came under banking and accounting as an essential service.
Ed: Well, you’ve got to understand, you actually get values every day. You get an estimate to have your car fixed, and there’s a number at the bottom of the page. That’s sort of like an appraisal. Your house gets appraised for a loan or a mortgage. Your insurance company comes in after a car accident. They’re valuing what the car is going to be. Appraising is a general term, and it’s very important. It’s not proof of ownership, but it does help establish that you are in possession of the product. It establishes a value and identifies the product; it’s not necessarily always authenticating.
Sharon: I’m learning something then, because I always thought if you have the piece, then you own it. I guess you could steal it and have the piece.
Ed: Yeah, something could go wrong. You could lose it. It’s good to have a record. That’s what an appraisal basically is; a record. I do a lot of work where people aren’t insuring their jewelry. They’re just keeping a record for themselves in a safety deposit box. As a matter of fact, with some of my better clients now, the kids decided they don’t want the jewelry. They’re my high-value clients, and we’re doing a value of what the jewelry could be sold for after their time of death, so the kids don’t have to go crazy. At first, I thought it was nuts, but I understand it better. I’ve been getting a lot of calls from my high-value clients to do that.
Sharon: I can see how that would eliminate a lot of bickering afterwards.
Ed: A tremendous amount. So, appraising is used every day. Besides jewelry, which is my specialty, I still did floor plans for some companies and manufacturers for another firm that would call me in. A lot of stuff is looking at numbers and checking and doing the research and valuing it in that aspect. Appraising is basically a lot of research and comps and documentation. You don’t always have to put everything into the appraisal, but you do have to keep it in your notes.
Sharon: If you were doing all of this during Covid, was there a change in what you were appraising? Was it one-offs versus a whole estate where somebody had died?
Ed: No changes. The only change was the research. It was very limited because people weren’t in. Things stopped, so I couldn’t research or make calls or do anything as much as I normally would. I had to put a disclaimer in their reports saying, “This is during the time of Covid, there’s a national lockdown, blah, blah, blah,” and that research, which might be necessary, is not obtainable at this point.
Sharon: Today do you see a change in terms of the things you’re seeing?
Ed: That’s very funny. A change in procedures, no. When things go back to pre-Covid and things are moving smoothly, people again want an appraisal for insurance. They may still want an appraisal because they’re looking to get an occasional order to be sold or just for their own knowledge. So, procedures are back to pre-Covid.
What is different now is that people are learning. The internet has become very, very big in the jewelry industry. You could find almost any piece of jewelry you want on the internet, and you’ll probably find it for a very good price. There are so many sites that sell loose diamonds—and if you’re in the trade, you’ll understand what I’m going to say—and there’s a price list of things, and they’re discounted. Some of these sites are literally wholesaling diamonds for the public, sometimes better than a jeweler can pick them up for.
In my opinion, it’s created a problem in the industry and for me. Do I use those sites as a comp, or do I have to take into reality what a jeweler might put on the price to make his fair markup? Which isn’t much on a diamond. A fair markup on a diamond today could be 5% to 20%. In some situations, it’s more, but there are reasons why, price points, things like that. When you’re appraising, it’s a lot of market research. As a matter of fact, a lot of organizations now require that the appraiser put in a market analysis for the appraisal. Is it really necessary? Yes and no. In some appraisals it is and other ones it isn’t.
Sharon: Have you had anybody come back and argue or dispute an appraisal that you’ve had?
Ed: I’ve had people come back and say, “I had it appraised in 2008 for more money,” and I explain to them and show them that times have changed and markups have changed. Once it’s explained to a person, they understand that. I can only value something on a certain date. I can’t predict the future or anything like that. So, is it sad? Yes.
We just got done with a situation where one report from a government agency, who will remain nameless, said that the diamond business increased in value from 2013 to 2020, and I’m like, “No, it didn’t.” I used one of these lists, the Rapaport List, and I showed them the decline in the marketplace. Why are you saying it went up 30% when it declined? I do a lot of reviews and a lot of work within the trade for estates and trusts of people. There’s a lot to it, to establish certain markets and things like that.
I think today, what I’m seeing at the little office in Nashville I use—the appraiser there got ill, and she can’t work anymore. So, I go up and take care of clients and give her a percentage of everything, so she can afford to pay her bills at least. What I have noticed there is an increase in sales of lab-grown diamonds.
Sharon: I was just going to ask you about that. Do you see more of those?
Ed: I’m seeing more, which is unusual, but then again when I go to Nashville, I’m dealing with the public. I really enjoy going to Nashville. The people up there are great. I have such a good time appraising and having conversations. I do see more and more of it coming. I have to admit that, even with friends of mine, even though some people disagree and there are reasons why they don’t like LGDs, but to me, it’s a diamond. It will test as a diamond. It is a diamond. You can’t pick up a loupe and look at it and say, “This is lab-grown.” It’s a real diamond, and they’re very, very inexpensive.
We’ve got to look at these things. You’ll have reports coming out saying, “Well, they don’t hold their value.” O.K., is a person really buying a diamond engagement ring for value? Because if you pay $10,000 and you go to sell it, you’re only going to get $4,000, so it has lost value. Are you buying the ring for value or an investment, or are you buying the ring for love and a symbol? I think a lot of younger people—and I hate to say this, but even us older people are realizing it’s for enjoyment. It’s for fashion, and it’s a symbol. It is not a symbol of, “Look, I spent $25,000 on a two-carat ring.” I have a two-carat ring, but it only cost me $4,000.
I have a very dear friend. His son wanted to get a stone, and he asked me for the lab-grown. I said, “Fine, what do you want?” He said, “Well, on this website it’s $15,000. Dad said you could do better.” I said, “Let me make a call to a supplier I know.” Yes, I got him a five-carat D VS1 oval cut for $5,500. The equivalent stones can be very, very expensive, tens of thousands of dollars more. Is he happy? Yeah. Will anybody realize the difference? The guy’s in law school. Daddy has money. No, they’ll probably think it’s real or a natural stone.
I even recommend them to my family. My son, my daughters, they all end up doing lab-growns because you’re wearing it on your finger or your ear. If you spend $2,000 on something, it’s not the same as spending $15,000. So, yes, I do recommend them. As a matter of fact, a lot of people I know recommend them now. I’m seeing an uptick. Even secondary market jewelers who do things for their clients are starting to get requests for lab-grown diamonds. They’re taking their market share.
Sharon: I can understand that.
Ed: It’s funny. Originally, I was trying to get something going where there had to be fines and things like that for lab-growns. Going back five or six years, most people were saying it was just a fad that wasn’t going to develop into anything. Well, guys, it’s developed into something very fancy. I don’t have the stats right now because I haven’t checked in a while, but I’m sure if you called JA or one of these groups that monitors things, we’ll see a large increase in the sales of lab-growns.
Sharon: That’s interesting. It took me a while to get used to it, but you’re right; it’s exactly the same as the diamond. What does it matter?
Ed: Exactly. Again, like I say to people, you’re not buying it for an investment; you’re buying it as a symbol of love or devotion or whatever you want to use it for. I’ve seen women buying themselves diamond studs that are lab-growns. They’re like, “Well, why should I wait for my boyfriend to buy me one?” It’s not $20,000 anymore; it’s $2,000, $3,000, and they’re taking it upon themselves to buy it for themselves.
Now, don’t get me wrong. If the average person who wouldn’t have the money for a five-carat diamond buys a five-carat lab-grown, yeah, people wouldn’t know it’s not a real stone, or a natural diamond I should say. It’s still a diamond, but people would not suspect this person could afford it. They would think it’s CZ or moissanite or something like that. But as long as you stay within the realm of what your circle is, nobody would ever suspect that you have a lab-grown diamond.
Sharon: That’s interesting. It’s worth a second thought.
Ed: Yeah. I strongly recommend them.
Sharon: I know you do a lot of teaching, too.
Ed: I don’t teach regularly. I host classes down here every two years because we all need to get our seven-hour update. Between you and me, not much changes, just the wording, but I have an old friend, also from Jewelry Camp, who comes in and does it. She’s a certified instructor and does the seven hours. To be honest with you, it’s really done for selfish reasons, which is mainly so I get my time in and I get to travel somewhere.
Believe it or not, business down here in the southeast is quite plentiful; it’s quite important. Do I see large, 20-carat diamonds? No, that’s New York or Florida or California, but I do see a lot of people. One of the things about appraising, you have to have a good bedside manner. You can’t insult people. I had one instance where I said to a gentleman, “These items are going to be appraised for less than a certain price point at $1,000. I don’t think you need to have them appraised and spend $150 an item on me, but if you want them appraised, I’ll do it.” I said, “It’s your prerogative.” He said he had a strand of pearls worth a lot of money, and I didn’t see a strand of pearls worth a lot of money. Standard cultured pearls under five or six millimeters is not a $20,000 necklace, but whatever. People are told things from relatives.
Funny thing: I had one person once, when I lived up in New York, and I looked at the string and said, “This is a textbook example of a synthetic sapphire.” “Oh no, my grandfather told me it’s a real sapphire and it’s worth a lot of money.” “I’m sorry to disappoint you, but no, it’s not.” I didn’t charge for the appraisal. A few weeks later, a colleague and close friend of mine, Barry Block, gets the same stone and said, “Ed, it’s a synthetic.” I said, “Yeah, I know.” “I’m trying to explain to her it’s synthetic.” I said, “Barry, don’t.” From what I understand, later on she took it to the GIA. They called it a flame fusion synthetic sapphire, and she still didn’t even believe them. You get people, when they’re told a story, they believe it. You can’t prove anything wrong because they believe it, even though you’re showing them pictures in the book and showing it through the microscope. They don’t quite want to hear what’s right or wrong. It’s interesting human nature.
Sharon: You brought up an interesting point. Last night I was watching a rerun of Antiques Roadshow. I was wondering if you look at the jewelry on there and think, “That’s not really the appraisal,” or “They never mention a buyer’s premium,” or that, if somebody gets something for $500, they’re going to pay at least more than half in fees.
Ed: Yeah, as I tell people, if you’re buying at auction, you’ve got to see what the fees are going to be. If you’re selling at auction, are there going to be fees? An estate I did here, after several months, the family decided to sell it. I had an auction company from New York I knew would do well with it come down and look at. It had some interesting pieces in it. Some of the pieces were not correct, and the client knew that, but they got some strong cash offers for the collection. As a matter of fact, the sale is coming up in Phillips this June. They decided to do that, and I was like, “That’s great.” I don’t care. I’m not making money on it. I did my fee for the appraisal, and I made the introductions and I was there. I was paid for my time, so it didn’t matter if they sold it for cash or sold it through auction. In that particular instance, there were a lot of pieces; it was a great collection. The client is paying nothing, but there are situations where the client does pay 15% or 20%.
When you’re figuring value, you’ve got to figure in the buyer’s premium when you’re buying at auction. Some places are as high as 20%, 25%. If you don’t figure that into your purchase price, you may overpay for something. Auctions are great because they’re a lot of fun, especially live when you’re in the audience. You watch people bidding, and then somebody really wants something. The auctioneers do their best to represent the best they can get for anything. They try to make sure what they’re giving you is accurate, but as I tell everybody, if you want to buy at auction, check the rules. Check what they have disclosed, check what they’re liable for, read the condition reports, look at the piece yourself, try it on. They all have previews. Decide that way, because that’s the best way, especially if you’re spending a lot of money.
You could save money on diamonds—natural diamonds; I can’t see putting a lab-grown up for auction—but you should be able to save a considerable amount of money buying something at auction. Again, like I said, going online to buy a diamond, you can save considerable amounts of money. I don’t recommend buying colored stones online because color is a personal preference, so you want to see that in person. But with diamonds, the normal person is not going to notice too much difference with their naked eye. As a matter of fact, I don’t notice too much either anymore, unless I have my glasses on. That’s about it on that, but I do recommend people are aware. Like I said, buying at auction is fun and educational for people.
Sharon: I’m surprised when they give a price and say, “The retail price would be this,” or “I think this would be conservative at retail.” I always want to jump in and say, “Oh, that’s retail,” but it isn’t really.
Ed: I know some smaller auction companies do that. I know some online sites that are selling people’s merchandise for them will say suggested retail, what the retail price is, and what they’re selling it for. It’s not misleading in my opinion. It’s just letting you know that the price was originally $7,000, and today you’re able to get it for $2,500. If you went into the store and bought it, you’d pay $7,000, but right now, it’s used; it’s in excellent condition; all the boxes and papers and everything else you need are here; it’s complete for $2,500.
Now, people who sell on those sites also have to keep in mind what the site is charging you as a fee for selling, because there are no buyer premiums there. The seller is paying that commission to those sites. You’ve got to keep that in mind when you’re doing something like that. People will go, “Well, I’m going to go have it appraised,” and I say, “Well, if you’re selling, why are you having it appraised? I’m not buying it.” In certain situations, I do the appraisal because there’s a reason. But if you’re selling something, I recommend you go to several places to get estimates. You’ll see the comparison, and the estimates will be very close to each other, and you’ve established a guideline.
Paying for somebody to appraise it who’s not buying it, I’m not putting my money where my mouth is. I could tell you, “You should be able to see up to $4,000,” and you go to four different jewelers, and they all turn around and say $1,800 or $2,000. I’m not buying it. I’m not working off a formula. I’m actually making calls to dealers, seeing what they’re offering, what the market is bearing. That’s how I come up with a price if somebody wants to sell something for them. I normally don’t recommend it because you’re paying me for my time. Like I said, if you go to three legitimate, honest, old-world jewelers, they will all be within the same range and be willing to work with you and get you a price. That’s what I suggest to people.
Sharon: That’s interesting. I wouldn’t think about not having it appraised. It makes a lot of sense. What kind of licenses or training do you need to do this?
Ed: There’s no licensing for personal property appraisers. There is licensing for real estate appraisers. If you want to appraise, you should take a class. Some of these organizations offer excellent classes to give you a background in valuation theory. There’s a number of books one can read. There are one or two schools that still teach valuation theory that I recommend, depending on what you want to go into. If it’s jewelry, the group ASA offers several good classes. AAA, another appraisal group, offers very good classes. ISA offers some very good classes.
One of the more important things a lot of people forget is product knowledge. How are you going to appraise something if you don’t have knowledge of the product? That’s where places like Jewelry Camp come in, where other lectures and talks come in. They are very important because, without product knowledge, you could hire an expert to look at it and tell you, yes, it’s real, but you should be able to do a lot of that yourself, unless you have a suspicion something’s not right. So, I do recommend product knowledge.
As far as theories and concepts, a lot of places like to make appraisals more important than they really are. As long as you do your research and your documentation, provide whatever is needed for that particular assignment, explain what you’re doing in your scope of work, and maintain all your files and notes, you’ve pretty much got it.
Sharon: We will have photos posted on the website. Please head to The JewelryJourney.com to check them out.
