Appraising Coins versus Selling Coins

If you are having your coins appraised, you are requesting a determination
of the value of the coins in the collection. If there is valuable die varieties or
coins worth a premium because of their state, condition, or something else that
would cause them to have a great value, the appraiser should inform you of this
as part of the appraisal, that is what you are specifically paying them for. This
of course assumes that the appraiser would have the knowledge to know what
to look for.

A typical appraisal might cost between $50 and $100 an hour. It is important
when getting an appraisal to get an estimate of how long it might take, what
it will cost, and what will you receive as part of the appraisal. The appraiser
will want to see the collection first before giving an estimate. A good appraiser
will generate a itemized list of your coins with their values. Others might just
provide an over value. When I appraise a collection, I make a list of the coins
when viewing them, making notes of coins that are worth a premium, then create
an excel work sheet with the itemized list with their values.

One easy method to help start is to create an itemized list of your coins yourself.
You can provide the appraiser this list before, and ask for his estimate of time
and cost based upon this. Breaking down your collection is covered in a later
chapter.

If an appraiser has the option to purchase the collection, some might not be
forthcoming if valuable coins are found so that they are able to purchase the
collection cheaper. If considering selling to the appraiser, one option is to inform
the appraiser that it is your intentions to have the collection or itemized list
shown to different dealers to get their opinion or offer also. When appraising a
coin collection, if purchasing the collection, then the appraisal fee is sometimes
waived as evaluating the collection is what would have needed to have been
done anyway in order to determine the value.

How do you determine the level of knowledge of an appraiser? What is their
experience in grading coins, knowing which dates and mint marks are rare,
and if they understand what to look for in die varieties. When appraising a
collection, I normally have the owner present and explain what I am looking
for.

For example, when checking modern proof sets, it is important to check for
the “No S’ mint mark proofs on certain years that are extremely valuable. As
reputation is important and as many appraisals are recommended by word of
mouth, most appraisers understand that if they do a great job, that could generate
future opportunities.

If offering coins for sale, most times it is up to you as the seller to determine the
value. The buyer is not normally obligated to inform you of an increased value
based on their knowledge. Some buyers will, but the majority would most likely
not. It is the same principle in selling a used car or a painting. A potential buyer
is going to ask for a price. If the seller presents a price to low, how many buyers
would offer more money than was asked? Some dealers might start at a lower
offer to maximize their profit potential. A collector might see a large premium
and sell, not realizing that they might have received twice as much if they knew
what their coins were worth.

Examples of coins that were purchased for much less that they value. One dealer
purchased an 1887 Indian cent doubled die obverse in nice uncirculated condition.
The dealer was offering it for sale for $2,500, which was very reasonable for this
variety in high grade. They stated that they paid $25 for the coin as part of an
estate they purchased on the way to the show. Another dealer who had recently
purchased a 1916 Buffalo nickel doubled die obverse in MS64 for $4,000, with
the coin easily worth $100,000 at the time.

A friend’s great-grandfather collected coins their entire life. After he died, he
left his collection to his son, who had his coins appraised. The appraiser offered
him the face value of the coins in the collection, much less than actual value of
these rare coins. They accepted the offer and sold them, not understanding what
the actual value was and how much they could have made.

This is not to say that dealers offering to purchase a collection are doing something
wrong or illegal. They are using their knowledge to get the most for the coins they
are buying. As the seller, you need to be knowledgeable on your collection.
For some coins, a small difference in the grade can easily result in a large
difference in value. For example, a 1883-S Morgan Dollar graded MS64 is
worth about $5,000, whereas an MS65 graded specimen can bring about $40,000,
almost 10 times for one point in grading difference. If a coin has a potential to
bring a large premium, isn’t it better to optimize the value you receive for your
coin rather than letting someone else get it?

One way to optimize the potential price realized is to attend a local coin show
that has many dealers attending. For example, there is a large coin show in
Baltimore, Maryland three times a year that has up to 300 dealers there. Pick one
or two coins that are valuable and you understand what the coin should bring.
If you show your entire collection to each dealer, this will take much more time.
Show it around to different dealers requesting a price. Determine which dealer
provide the best price, but also was informative in their communication with
you. Then show the remaining coins to this dealer.

A bucket of buffalo nickels was sold to a dealer for a set price per coin. Two
months later, the dealer sold the coins to a different dealer for three times that
amount. Its a good idea when selling your coins to check with multiple dealers
and also learn which dealers will pay the most. It is a good idea to establish a
relationship with a coin dealer or company in your area that you feel comfortable
with and trust.

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