Coin Appraisals Serve Varied Purposes
By Mark Ferguson for CoinWeek – MFrarecoins.com
As an owner, or buyer or seller of rare coins, have you ever thought about how a professional coin appraisal can help you? Normally, we think of coin appraisals as being used primarily for estate valuations after the death of a collector or rare coin investor, for insurance purposes, or for loans on your coins. Of course, appraisals are very useful for those reasons, however there are many other useful purposes served by having coins appraised.
For example, after you’ve purchased rare coins, do you really know if you’ve received fair value for the prices you’ve paid? Too often, owners of rare coins discover the mistakes they’ve made in purchasing when they finally try to resell their coins many years after their acquisition. The two most common mistakes are overpaying and buying coins that are below average for the grades assigned. An appraisal by a competent professional numismatist can often spot problem coins within your collection or investment portfolio and help you determine what to do about those problems.
Similarly, a less obvious mistake in collecting and investing in coins for profit, is buying coins that are unpopular or just too common to offer much appreciation potential. Of course, professionals will have varying opinions on this subject, but this is one area in which a competent professional can be of help to you in the long-run, before you invest more money in your current collecting and investing strategy.
Coin appraisers can also help you facilitate trades of coins. While the cost of an appraisal for this purpose won’t be warranted for common collector coins, it can be very beneficial when trading complete collections for other coins or bullion, or obviously for many five, six and seven figure coins (while the market waits for the first eight figure coin!).
And here’s where the cost of having your coins appraised can really help you: in finally selling your collection or investment portfolio. Some coins will do well at auction, while others won’t. And an analysis of your coins – again, by the right professional numismatist – can often help you decide in the selling process which coins might bring better prices if they’re resubmitted for grading, for example. Are you up to speed on some of the newer services offered by PCGS and NGC? Are you aware of the higher price levels CAC verified coins are generally trading for and how to capitalize on the opportunity of getting them stickered by CAC?
Finally, another area in which you’ll often need an appraisal for is when donating your coins to a charitable organization. This is an area for which I performed coin appraisals for multiple donors last year. It may be a growing trend. Similarly, I’ve done appraisals for people who want to give their coins to their heirs and have them evenly distributed in value. A coin appraisal can help you facilitate that goal.
The right numismatic pro can help guide you to higher profits. An appraisal review of your holdings may uncover untapped profit potential in the rare coins you own – often through re-grading, but also in advice about how to favorably market your coins, or even in dumping some of the mistakes you’ve unwittingly made and upgrading. Sometimes assistance in selling your coins can even take the form of negotiating consignment terms with auction companies for larger holdings.
But, keep in mind that just because someone makes a living at buying and selling coins does not mean that person is qualified to give you competent advice in all areas of rare coins. For example, while many coin shop owners across America are good at what they do, they are mostly dealing with the public who have built their collections from change or by buying from coin shops whose primary source are from accumulators who’ve found their coins in change. On the other hand, those coin dealers who specialize in high-end rarities often cannot be of good service to you with more common circulated coins. It goes both ways. But there are also many good dealers who’ve had experience in all price ranges and grade ranges of coins.
While I was the Market Analyst for Coin World’s Coin Values price guide between 2002 and 2009, I enhanced my more than 30 years’ experience at that time as a coin dealer, which was put on hold during those years, and gained new insights into how to seek out coin prices from various sources for all price and grade ranges of coins. Of course, I found that auction records are the best sources for the high end coins, but it takes experience to know why some coins bring strong prices and others weak prices, as well as where to dig up values for low to medium value coins. There are also many nuances involved in determining the values of rare coins, especially in knowing how coins have traded, based on their grades, and what market segments are hot and cold or are being promoted, as well as in the grading services’ population and census reports.
In addition to experience level, if you’re going to hire a rare coin appraiser, you should try to determine for yourself the biases and motivations a coin appraiser might have when dealing with you. For example, is the appraiser a dealer who hopes to buy your coins to profit by reselling them? That bias could result in a lower appraisal value. Does the appraiser lack in understanding how getting your coins stickered by CAC may benefit you? Or, if the appraiser ends up buying your coins, will he later resubmit them for re-grades that result in higher profits that could have been yours?
Other cautions may be obvious. For instance, a red flag should go up if the appraiser wants to charge you for his services based on the value of your coins. A fee-based appraisal is best. And, obviously, fees are negotiable. An hourly rate may be agreed upon, or an appraisal can be done on a project basis. Do you want a full-fledged typed out report, or do you just want an informal review and discussion of your coins? Another consideration is: if travel is involved, who pays the costs?
Cautions aside, coin appraisals can often help you earn higher profits for your coins, or help you facilitate sales and exchange transactions. They can also often be of help to you in negotiating a large purchase, or in making auction purchases. Consider the fees money well invested, if you use the right numismatic professional.
Mark Ferguson was a coin grader for PCGS , a market analyst for Coin Values and has been a coin dealer for more than 40 years. He has written for the ANA, Coin Dealer Newsletter, Coin World, Numismatic News, , Coin Values, The Numismatist and currently has a weekly column on CoinWeek. Mark can be reached at Mark Ferguson Rare Coins ( www.mfrarecoins.com)