A look back: The Ultimate Trade
Back in 1980 the housing market was so bad, I recall that my parents couldn’t sell our very modest home in Hollywood, Florida. We needed to get out from under the thing so dad could take a professorship at Old Dominion University. Interest rates at the time were in the high teens and nothing was selling.
Ultimately, as he describes in the chapter, he traded our home for a small box of gem type coins. Can you imagine such a trade today?
At the time, dad specialized in circulated collector coin like Barbers, Buffalos, and the like and he did not yet have an eye for gem quality material. I say “gem”, back then that meant many different things to many different people. This was before third party grading really took hold on the hobby. Needless to say, the coins he picked weren’t all what they were cracked up to be in terms of quality.
At the same time as our move to Virginia after the infamous “House Trade”, the coin market hit a cliff and prices went into a free-fall.
The combination of my dad trading for overgraded type coins and the market fall, put him in a horrible position.
It took us over 10 years to sell off the “House Coins” and I think we were lucky if we got 20-cents on the dollar. Even worse was that each coin was a painful reminder of the deal for my dad, and it taught us both a huge lesson about being careful with inventory and grading.
Now, in 2015, I have been a Virginian for 35 years and Virginia Beach has been home the entire time. My dad would love to know that this was actually the best move we ever made.
– John Feigenbaum
In June 1980 I traded my house in Hollywood, Florida to a part-time coin dealer. It was the worst deal I ever made and made me feel guilty about letting my family down for several years. But it also kept my coin business going throughout my oceanography career, and that was a good thing, or I wouldn’t be writing this today. Here’s how it came about.
I had gotten my Ph.D. from the University of Miami a few years earlier and, after a post-doctoral fellowship at Woods Hole, was waiting for a decent job in the field. Even though my credentials were good, the job market for oceanographers was so poor that I had almost given up when the call came.
Old Dominion University offered me a faculty position beginning in August, and it was already May. We had a nice house in Hollywood, complete with swimming pool, and it should have been easy to sell. The problem was, interest rates were very high and the housing market was dead. Hardly anyone was even looking at my house, let alone making an offer.
At the time, I was teaching at a local high school and running David Lawrence Rare Coins in the evenings and weekends. In early June I got on a plane to do a show in Clearwater, Florida, and found myself sitting next to a fellow I knew from the Sunday coin circuit. Bored with his desk job, he bought and sold coins on weekends. We chatted and I told him all about my house woes. After a while he said, “I might be willing to take your house in trade for coins.”
The idea had not occurred to me. “An interesting idea. Let me think about it,” I said. As a coin dealer I was used to creative thinking and the thought of leaving an empty house behind when I moved was not appealing. Especially as I needed money for a down payment in Virginia.
By the return trip I was ready to talk terms. “Well, assuming we can get together on the price and I can have some money, a trade might be possible.” We didn’t have much time. About three weeks, in fact, because our move had been arranged for the first week in July. Fortunately, Lynn was used to my oddball transactions and was willing to go along.
Then came the hard part: getting together on the price and selecting the coins I would take in trade. I soon found out that his father was a real estate agent, which made the negotiations very one-sided. It also didn’t help that I was more anxious to sell my house than he was to buy it. To him, the deal was something of a lark, but to me it was a solution to a big problem.
After all the usual inspections — roof, termite, etc. — we finally agreed on $46,000 worth of coins (above the mortgage and some money for my down payment). By this time, because of his schedule and his bank’s hours, I had only two days to choose them. To make matters worse, he did not have the kind of coins I would have liked to select. His inventory consisted largely of better-date, mint-state pieces whereas I had been dealing chiefly in circulated coins. I was in way over my head!
To say that I suspected this would be a gross understatement. I knew what was going on and felt powerless to stop it. The deal just had too much momentum.
In 1980 there were no clear criteria for grading uncirculated coins. Grading has always been subjective and, like all coin dealers, he had his inventory graded very optimistically. Coins that he had marked MS65 were probably MS63 at best and those graded MS63 were lucky to be MS61. Oh, do I wish we’d had certification back then!
You also may recall that back in 1979-80 the Hunt brothers were trying to corner the silver market and prices of all coins were going through the roof. When they failed, coin prices began to decline. Considering all this, I was lucky to make out as well as I did.
A few days after I picked the coins, we loaded the rental truck and headed north. It was a couple of months before I even looked at them again. When I got the chance I repackaged them and gave each a designation “H” so I could keep track of how well I was coming out.
I forget the exact number, but there were something like 100 coins. Quite a few were uncirculated Morgan and Peace dollars. Fortunately, some coins sold quickly while levels were still pretty firm. But these were the best ones. Soon sales began to slow and, as the months turned into years, I began to slash prices.
I guess you could say I got tired of looking at these “house” coins for I became obsessed with selling every last one. A show was not considered successful unless I sold or traded away at least one of them. Even my family had them on their mind. Whenever I called home from a show, my wife would ask, “Sell any house coins?” My father-in-law Paul, then in his 70′s, posed the same question during our weekly phone calls.
Finally the bleeding stopped. One day in the early 1990′s I sold the last one — an 1866 Shield nickel. I think I paid about $300 for it and realized $36. In the end, I recovered less than half of the $46,000.