As an experienced coin dealer who has been in the industry for a number of years, we frequently see a large number of old and rare coins come across our desk. Our familiarity with these coins allows us to properly evaluate, grade and value these coins. By and large most of our customers have done some research in advance of their appointment to obtain a general sense as to the value of the coins, and oftentimes realistic expectations are established prior to the appointment. It’s readily apparent which customers have taken the proper approach with respect to researching their coins, and it’s even more obvious when individuals have gone about pricing their coins incorrectly. In this article, we’re going to highlight four common mistakes individuals make when attempting to properly value their coins.
Assume all Dates are Created Equally
Many individuals who are new to the field of numismatics wrongly assume that the value of all similar types of coins are the same, regardless of the year and location minted. These individuals typically search online for the absolute highest price of a coin that they can find and are extremely disappointed when they’re informed that the coin in their possession has very little value. While it’s certainly possible to find or inherit extremely rare and valuable coins, chances are that the coins you find in your grandmother’s coffee can aren’t million dollar coins. It’s important to keep in mind that the value of old and rare coins is based on the date, the mint location and condition of the coin, so be sure that you do your research on the specific coin that you have in your collection before estimating its value.
Use eBay “Buy it Now” Prices as Comps
While eBay is a great resource and is oftentimes helpful in determining the value of coins, a common mistake made by individuals is to assume that “Buy it Now” prices are accurate comps for the purpose of valuing coins. In our experience most “Buy it Now” prices are a decent bit higher than the price realized for many coins, and in fact, sometimes they’re many times greater than the market value of the coin. There are likely a variety of reasons why “Buy it Now” prices are a good bit higher than market prices. Some sellers may hope that a buyer without much experience will stumble across their coin during a search and overpay for it. Other coin dealers may be using eBay as a form of advertising without actually intending to sell their coins. Lastly, other sellers may need to sell their coins at a certain price to realize a profit and can only do so by ensuring that they receive their asking price for the coins. Regardless of the reason coin sellers choose the “Buy it Now” feature, it should be stressed that these values typically aren’t consistent with market prices.
Assume Redbook Prices are Market Rates
While we believe that the Redbook is an excellent coin resource, and in fact, purchase multiple copies of the book every year ourselves, we occasionally meet with customers who expect to receive Redbook prices for their old and rare coins. It’s important for individuals new to the coin market to realize that the Redbook provides estimated retail prices for coins. In fact, the prices at which coins sell; especially when you compare ending auction prices on eBay to Redbook values, are drastically different. The truth of the matter is that very few coin dealers are able to sell their coins at retail Redbook prices. In order for coin dealers to realize a profit, they need to purchase coins at wholesale rates, which are lower than market rates. If you’re new to the coin market, you may be surprised that prices quoted to you for your old and rare coins are substantially less than Redbook prices. This doesn’t necessarily mean that the coin dealer you’re working with is trying to take advantage of you; it may just reflect the price at which the coins can be purchased to realize a reasonable profit.
Use Online Retail Prices as Market Prices
While this point is very similar to eBay “Buy it Now” prices, we thought that it warranted a separate discussion. Much like “Buy it Now” prices, asking prices posted on coin websites for various items can vary dramatically, so it’s important to not give too much credence to posted selling rates; especially when trying to value rare coins. Case in point, we recently we met with a prospective customer that placed yellow “post it” notes with prices that he found online for all of the items that he was interested in selling. The prices were admittedly the highest that he was able to find through his online research. In one particular case, he had a $99 price tag on a 1976 40% three coin silver proof set. We quoted him a competitive price for the set, which was still about five times less than the price that he had posted on the item, and he promptly put the set back in his box. Needless to say, we unfortunately didn’t see eye to eye on most of the items that he was interested in selling. We recommend that you avoid using posted selling prices from websites as a gauge when valuing your coins; otherwise, you’re likely to have unrealistic expectations for your items.
In summary, we highlighted four methods to avoid when attempting to value your old and rare coins. Keep in mind that not all coins are created equally and that the year of mintage as well as the mint location can have a substantial impact on the value of your coins. Secondly, avoid “Buy it Now” prices as comps, as these prices are typically well above market rates. Thirdly, we recommend that you use the Redbook as a general guide, but that you don’t rely on it as a way to estimate the selling price of your coins. Lastly, asking prices on individual coin websites; especially for old and rare coins, are oftentimes well in excess of market, so avoid this approach as well. In a future article, we plan on providing tips on how to properly value your coins, but in the meantime, hopefully the above guidelines on what not to do will help you to put you on the right path.