What to know before you buy a coin with a Details grade
By Jeff Garrett for Numismatic Guaranty Corporation (NGC) ……
When it comes to grading rare coins, and interpreting the labels on certified coins, no subject can be as confusing as “ Details grade ”. During the course of a week, I receive numerous calls from collectors and other dealers asking for assistance placing a value on details grade rare coins.
For coins with so-called “straight grading”, or those without problems noted on the label, the task is relatively easy. You can check price guides, population reports, and auction records. These tools, along with decades of experience, usually yield enough information to make a purchase decision.
The job becomes much more difficult for coins that have been “net graded”, another term for Details grading. These include coins that may be described as Uncirculated Details – Obverse Cleaning. Others might say About Uncirculated Details – Reverse Repair. The combination of grades and notations seem almost endless, and make the task of assigning value extremely tricky.
For many years, coins with problems were returned in plastic bags otherwise known in the hobby as “body bags”. This grim term and result irritated countless submitters, who had paid fees to have the coins encapsulated. The decision was made to holder coins with problems, but to make notations why the coin had not received a “straight grade”.
Many dealers and collectors cheered this development for a variety of reasons:
- First, no one likes wasting a grading fee for a coin that had unnoticed problems.
- Another important issue is that most advanced coin collectors have their coins in third-party grading holders. It is impractical to fill an important hole in your collection with an uncertified coin.
- When trying to economize, it is much safer to include a net grade coin that has been authenticated. Also, some coins are simply too expensive for most collectors in straight-grade holders. A four-dollar Stella would be a great example of this. Certified coins with problems sometimes sell for $30,000 to 40,000. By contrast, the lowest-grade examples that have been graded usually sell for six figures.
One of the reasons that pricing net graded coins is so difficult is the wide range of quality that may be found with same description. As mentioned above, NGC is very diligent identifying coins with problems. A coin with faint hairlines may be unnoticeable to a novice collector, but would result in the coin being net graded Uncirculated Details – Cleaning.
The problem is that coins with more advanced or harsh cleaning could have the same label description. For now, stages of cleaning have not been quantified for the rare coin market. The same can be said for coins with scratches, environmental problems, rim nicks and assorted repairs.
As mentioned above, one of the most common questions I am asked about coins that have been Details graded is how to determine value. This can be very difficult because every coin is different. The degree of cleaning or other impairments can vary from light to very harsh.
In general, the value of a Details-graded coin is usually set at least one grade lower but sometime two or more grades. For the best advice on the value of these types of coins, you should consult a professional numismatist. Another suggestion is to compare actual auction records to photographs of similarly described impaired coins that have sold in recent years.
When comparing auction records, it is critical to examine the coins carefully. Coins with minor problems might bring only a minimal discount. Coins with severe problems usually sell for severe discounts. Remember, these two coins could be described exactly the same on the label. When purchasing expensive Details-graded coins, you need to do your homework.
Not all coins are eligible for Detail grading. NGC will not holder coins that have material applied to the surfaces or active surface decomposition. This includes coins that are deemed to have questionable toning, active corrosion or traces of PVC residue on the surfaces. Issues such as PVC and carbon spots can become worse over time. When sealed in an airtight holder, it could make the situation worse. These coins can sometimes be professionally conserved and later encapsulated.
Artificial or questionable toning is an issue that is among the most perplexing for some submitters. Keep in mind that NGC makes every effort to ensure that coins they encapsulate are original and not the result of some coin doctor’s lab experiments.
Remember, for every coin NGC grades, they risk their reputation and sometimes place hundreds of thousands of dollars on the line for a $100 grading fee! If color, toning, or surfaces come into question, NGC has no choice but to err on the side of safety. This is for their protection and that of the many buyers who purchase NGC products in the future. Unfortunately, some coins that you know came from an original source will sometimes be sent back as “no grades.”
As tempting as it may seem to save large sums by purchasing a coin that has been Details graded, you should closely consider the coin’s resale value. Coins with problems are much less liquid, and bring considerable discounts in the marketplace. Lesser coins are usually not the best investment in the long run. I have seen countless collections from bargain buyers who would have been much better off if they had avoided problem coins.
The advice “buy the best you can afford” is timeless and almost always the best course of action.