Top Ten Buyer Mistakes When Buying a Diamond
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Buyers Beware! We have all heard that statement at one point or another, and when purchasing a luxury item like a diamond – it has never rang more true. Most diamonds when purchased will come with a Gemological Institute of America (GIA) certification that outlines the details of that diamond. On that certificate you will find the “4 C’s” of that diamond as certified by the GIA. While this information is the basis for what the diamond is worth, in many cases it does not tell you the whole story of that diamond.
Over the past twenty years, we have heard countless nightmare stories about our clients’ experiences buying a diamond before working with us. To help those who have just begun their journey, allow us to let you in on a few tricks of the trade. We hope to save some much needed time, and money in the process.
1. Buying from a chain store or the Internet
All diamonds come from the same place, the earth. What set a price for a diamond is a combination of the “4 C’s”, and profit margin added by the seller. Chain stores have a high profit margin, and therefore, never have the best price. Most Internet sellers do not own their diamonds (they are consignees from a wholesaler) which means the profit margin is doubled. The best place to buy a diamond is from someone whose cost is low and can afford to sell it at a lower profit margin. This can only be done with a wholesaler.
2. Buying an EGL, IGI or HRD certified diamond
The #1 certification for a diamond is the GIA Certification. GIA is internationally respected and considered to use the most accurate grading curve in the industry. The same can not be said for EGL, IGI, and HRD. Their grading curve is liberal and often results in inflated grading reports. In short, a dealer can charge more for a diamond when using a EGL, IGI or HRD certification- which means a GIA certified diamond is actually cheaper. Request a GIA certification when purchasing your diamond, and you can be sure you diamond is appropriately priced and will retain it’s value. It is worth noting that a GIA appraised diamond is not the same as a GIA certification- request the GIA certification and you can’t go wrong.
3. Insisting on a perfect cut
There is no question that if two diamonds are equal in every other respects, the better cut diamond is prettier. The problem is that no two diamonds are ever equal in every respect. When looking at diamonds explore all your options carefully. You may find that a less than perfect cut, at the right price, is the perfect diamond for your engagement.
4. Buying a small, fine quality diamond instead of a big diamond
Buying a diamond is a large investment. It is important to understand what is important to the person who will be wearing the diamond. Most people prefer size over quality and due to price increases of diamonds over time, it costs more to trade up a small fine quality diamond then to buy a big diamond that might be of lesser quality now, but will be worn forever.
5. Not investigating your jeweler’s return policy and trade-in policy
Buy a diamond form someone with a 90-day return policy or from someone who will state in writing exactly what they will pay you for your diamond if you wish (or need) to sell it back after 90 days. Also, ask how much of an upgrade is necessary for you to receive 100% of your purchase back on a trade-in.
6. Avoiding florescent diamonds
Florescent is just one tiny little characteristic of a diamond that almost never has any significant impact on its appearance. It should have an impact on your diamond’s price and resell ability, however. If the color is D-G with a strong blue florescence and does not appear hazy and is more than 20% cheaper than a non-florescent diamond, then it is a good buy. Medium blue diamonds are a good deal if they are 15% cheaper and faint blue diamonds are worth as much as diamonds with no florescence. Also, florescence is a positive trait in a diamonds below J color because it make them appear whiter.
7. Buying a diamond on sale
There is no such thing as diamonds on sale. Diamonds are a resalable hard asset with a finite liquidation value, like an ounce of gold. Nobody will sell you an ounce of gold below the spot price, and no one will sell you a diamond below its liquidation value.
8. Buying a small looking diamond
Diameter matters. Here are some examples, and remember, diameter is how the width of the diamond looks.
A) Buy a 6.4 millimeter 1 carat diamond as if it really weights .95 carats (it should be cheaper because it looks smaller)
B) Buy a 7.3 millimeter 1 1/2 carat diamond as if it really weighs 1.40 carats.
C) Buy an 8 millimeter 2 carat diamond as if it weighs 1.90 carats.
9. Not researching your diamond seller
Consult the Better Business Bureau or an independent appraiser before buying from anyone. The fact that a jeweler advertises on T.V., or claims to make jewelry for the stars, or claims to be a diamond cutter does not make them honest or knowledgeable.
10. Buying a diamond solely on the basis of a certificate
Once in a while even a GIA certification can be misleading. Diamonds are graded on a continuum, and some SI’s are better than others. Some I colors are better than others. Some diamonds have a hint of brown color that makes them more or less desirable, depending on whether the diamond looks better or worse than other diamonds with the same grade. It is important to do your homework and research before you start to look. For instance, a white imperfection is better than a black one, and an imperfection on the edge of a diamond is better than one in the middle. Light graining or a cloud that is not hazy is better than a more pronounced imperfection such as a crystal or cleavage, and big naturals and cavities are undesirable unless the diamond is priced cheaper.
When you walk into your jewelers office to look at diamonds be prepared with a wealth of knowledge and you will avoid the top 10 fatal buying mistakes, and walk out with the perfect diamond for you and your significant other.