AUCTION BUYING AND PRICING
I'M READY TO JUMP OUT OF MY SKIN!
Why will people pay crazy money in auction-when I can sell them the same coin for less? Its something that has bothered me so bad that I saw no way to change it-I started my own auction company. I see who I registers to bid. I shake my head in amazement how they won't buy from dealers, but they will chase a coin at any price almost in auction.
At auction, the price you pay typically is higher then normal. People forget, auction is a competition to see who can buy a coin for the highest price. I have seen somany times some pay $5,000.00 for a coin they can buy at any major show for $4,500.00. Plus, how can you buy from the internet only auctions where there are no descriptions and no qualified numismatists? Have coins really just become a plastic widget commodity? The majority of bad aucton purchases are from Internet sale, then phone book size huge auctions.
All I am saying here, is collectors should work more with dealers. They will save themselves a bunch of money and a good dealer will be a safety net down the road when it comes time to dispose of their collection. Remember, at auction you immediately LOSE 17.5% off the top from the buyers fees (like the 20% you loose driving a car out of the showroom).
The right time to really uncork and pay a lot in auction-is for a fresh rarity or a wild coin. Wigets should not be bought out of auctions! Collectors, start using some common sense!
This is a serious problem. It is my VERY strong opinion that most pricing guides are worthless. The CDN (whic is supposed to be WHOLESALE only) is horrible and the guy has the gaul to tell dealers to report the prices to him-he is too cheap to hire a pricing guy. So his accuracy is way out the window. Collectors Universe tries hard to keep their "retail" prices updated-but in many cases, when coins have not sold in years or if there is a sudden market move, they don't pick it up. I do not know of ANY internet or printed pricing guides that are really reliable.
This has become so severe of a problem-especially to NEW collectors. Try and sell a killer colored Commem you just paid say DOUBLE of what any pricing guide anywhere says. New collectors miss out on so many coins because they don't know what reality pricing is. My market suffers the most because I always step up and paymore then any price guide.
To value a coin, you MUST consider the following, is it new to the market, what holder is it in, is it CAC, the ranking of its quality, VERY important: the eye appeal, where have others been selling, etc. Pops help, but the value is really determined by the physical coin itself.
My solution (for Legend purposes) has been to write the last auction price realized-with an explaination (I can go back and see how the coin compares most of the time). The problem with that is the collector does not know if the coin that had sold was of similar quality (we have seen prices vary as much as 100% in the same grade). BUT, I have come to the conclusion using auction prices realized is as up to date as you can get. Those prices should ONLY be used as an estimate. On the bourse floor dealers now pretty much use auction prices realized as a major part of their pricing decisions. There is no firm scientific way to figure pricing.
One thing that is amusing yet annoying to me, dealers and collectors are not taking into account that if a coin sold last in 2009-thats now 6 years ago! They still use a published auction price like it was last week. Hello! Six years and none have sold? Sounds like the price should be a little stronger. Can't understand this-but I see it happen reguarly.
Nothing annoys me more when I hear people think Legends coins are priced too high. Of course they are. I pay strong prices to buy the VERY best coins. Unlike so many other dealers who either are crackout dealers, bottom fishers, or are incompetent wannabes, the coins I sell are all there and then some. Those are the coins you have to pay up for. Its not me using a big market up. In fact, due to the strong prices we pay to buy the right coins, Legend probably has the lowest actual mark up of any major dealer. The collectors who do understand what we do and trade with us have all done very well. We've gone on to be the exclusive dealers to world class collectors like: the Law Collections, Bob Simpson, Bruce Morelan, the Coronet Collection of Morgans, and many others who I can not name,
Bob Simpson has the most intelligent view about pricing: he buys today for tomorrow. he knows simply to buy the very best and not worry about pricing as long as I deem a coin not out in zombie price land. After all, paying even 50% too much today won't stop you from making 300% on the right coin is several years. I have bought him so many coins in the last 5 yeasr he could easily sell today for substantial profits. It has NOTHING to do with the dollar valuee of a coin or his wealth.
This Hot Topics is about understanding how and why paying top dollar when the pricing guides show less is safe and will not hurt you-so long as you are buying the quality thats comensurate. There is simply is NO accurate or real reliable pricing sytem for collectors. I highly suggest you use auction prices realized-but use them ONLY as an estimate. And know Legend's prices certainly ARE within the right range for the quality offered.
Last, work with a good dealer. Collectors want to do it on their own and just about always end up far from where they should have been. A good dealer will know the real market and what pricing is apporpriate. They WILL save you money in the long haul. They will also make sure you do not miss a PQ coin because of pricing!
Any comments, please email me direct: firstname.lastname@example.org