Appraisal Versus Selling - Appraising Your Coin Collection

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Copyright 2015 by Kevin Flynn, All Rights Reserved

One quick note before beginning. This book presents many examples whereas individuals sold their coins for much less than they were worth. This does not mean or imply that every dealer or appraiser will undervalue or not be honest when purchasing your collection. There are many honest dealers out there, sometimes it takes time to find the best ones.

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.

Previous: Leave or Sell Your Coins
Next: Staying with your Collection
Copyright 2015 by Kevin Flynn, All Rights Reserved

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