Posted by Jeff Garrett on the Numismatic Guaranty Corporation Weekly Market Report …..
Selling by private treaty gives the seller a chance to determine by negotiation the final amount received.
My last article discussed strategies to be a successful consignor to rare coin auctions. Auctions have become a much larger share of the rare coin market in recent years, but they are definitely not the only way to sell coins. For generations rare coin dealers around the United States and the world have bought and sold untold numbers of coins. There are several reasons many choose this route as opposed to auction. Some collectors also choose to deal with fellow collectors who they have developed relationships with over the years. Whichever route a dealer or collector chooses to sell their rare coins, some simple advice may be useful.
One of the greatest benefits of a private sale for rare coins or currency is the certainty of the price you will receive. Selling your numismatic material at auction can be quite successful, but the price is not guaranteed. Many do not have the stomach to consign material unreserved and have no interest in repurchasing the coins that do not meet reserves. Selling by private treaty gives the seller a chance to determine by negotiation the final amount received. It also helps to avoid breaking a set of coins and ending up with just a few of the coins that did not meet reserves. Many collectors also like to sell coins in phases, and not all at once, which might be the recommended course of action if selling at auction (to receive the lowest commission rate). I have known many collectors over the years that enjoy selling a coin now and then just to have a better understanding of the market.
Many serious collectors of rare coins have worked with a rare coin dealer to assemble their collection. This is highly advisable for many, as the decades of experience that some dealers have is invaluable. The same advice can be used when deciding to sell your coins. A reputable dealer will help you sell your coins for the most money. This might mean placing some coins with another serious collector, selling off quality coins wholesale and maybe even advising on what coins should be consigned to auction. Every collection is different and expert advice is well worth the commission a dealer might charge.
Another major benefit to selling your coins privately is instant cash flow. It can take months to be paid when selling rare coins at auction and for many the reason for selling in the first place is the need for cash. Auction houses will give cash advances, but most charge interest and a set-up fee. Also, the market for your rare coins could change while waiting to be sold. Many collectors and dealers have not seen a down market for many years. I have been buying and selling coins for nearly 40 years, and I promise markets do not always go straight up. This can be especially important as the market for top end coins has soared recently.
As mentioned last month, not all coins are ideal for selling at auction. A trusted advisor can help you cull your collection before it is consigned to an auction. Coins with less than ideal market appeal can be sold wholesale. Very common coins such as generic gold coins, silver dollars and proof sets trade almost like commodities. They can be sold for a much smaller commission rate than most auctions houses would charge. There are dealers around the country who specialize in these areas and will make close buy sell spreads. Again, with bullion prices fluctuating, selling by private treaty will help to avoid an unpleasant swing in the market.
Another reason to use the services of a rare coin specialist is that many markets for rare coins and currency can be rather thin. This applies to everything from ultra high grade coins to tokens and medals. A dealer might know just the right customer for your coin or currency. If there is only one serious buyer in the country for a particular issue, they will face little competition if the item was consigned to auction. Plus, many buyers get very excited when they have an exclusive opportunity to purchase something. I have literally seen fist fights break out on the bourse floor over first shot at something. This excitement can be used to a seller’s advantage if played correctly. Again, expert advice is necessary!
The rare coin auction business is very competitive and so is the rare coin market in general. If you have rare coins to sell, there are hundreds of rare coin dealers willing to buy your merchandise. Every coin and currency publication has ads from companies trying to buy material. Fresh merchandise is the life blood for any numismatic professional. Most dealers are very willing to make offers for coins or collections. If you have not worked with a dealer exclusively in the past, it will pay to get multiple offers for your material. First, try to find dealers who specialize in the area that you collect. Another great idea is to offer a single coin to different dealers and find out their level of interest. You will be able to figure out pretty quickly who you like dealing with and who pays the most money. This will also save the time and hassle of having someone spend considerable energy on a collection they do not buy.
If you have a collection to sell in the near future, hopefully the information provided in my last two articles will help guide you with this important decision.
Questions about the rare coin market? Send them to [email protected].
About Jeff Garrett
Jeff Garrett, founder of Mid-American Rare Coin Galleries, is considered one of the nation’s top experts in U.S. coinage — and knowledge lies at the foundation of Jeff’s numismatic career. With more than 35 years of experience, he is one of the top experts in numismatics. The “experts’ expert,” Jeff has personally bought and sold nearly every U.S. coin ever issued. Not a day goes by that someone doesn’t call on Jeff Garrett for numismatic advice. This includes many of the nation’s largest coin dealers, publishers, museums and institutions.
In addition to owning and operating Mid-American Rare Coin Galleries, Jeff Garrett is a major shareholder in Sarasota Rare Coin Galleries. His combined annual sales in rare coins and precious metals — between Mid-American in Kentucky and Sarasota Rare Coin Galleries in Florida — total more than $25 million.
Jeff Garrett has authored many of today’s most popular numismatic books, including Encyclopedia of U.S. Gold Coins 1795–1933: Circulating, Proof, Commemorative, and Pattern Issues; 100 Greatest U.S. Coins; and United States Coinage: A Study By Type. He is also the price editor for The Official Redbook: A Guide Book of United States Coins.
Jeff was also one of the original coin graders for the Professional Coin Grading Service (PCGS). He is today considered one of the country’s best coin graders and was the winner of the 2005 PCGS World Series of Grading. Today, he serves as a consultant to Numismatic Guaranty Corporation (NGC), the world’s largest coin grading company.
Jeff plays an important role at the Smithsonian Institution’s National Numismatic Department and serves as consultant to the museum on funding, exhibits, conservation and research. Thanks to the efforts of Jeff and many others, rare U.S. coins are once again on exhibit at the Smithsonian Institution’s Museum of American History. We urge everyone who visits Washington, D.C., to view this fabulous display.
Jeff has been a member of the prestigious Professional Numismatic Guild (PNG) since 1982 and has recently served as president of the organization. In 2009 and 2011, Jeff ran successfully for a seat on the Board of Governors for the American Numismatic Association (ANA), the leading numismatic club in the world. He plans to run for ANA vice president in 2013.