Dr. Sol Taylor

Selling Your Rare Coins

By Dr. Sol Taylor
"Making Cents"
The Signal
Saturday, July 8, 2006

ny serious collector who has patiently accumulated rare coins over a period of decades will probably feel the urge to sell at some point. The motivation varies from collector to collector. Some are motivated by their age, others for business reasons, and in a few cases, circumstances such as a divorce or probate forces the sale of a collection.
    For the sake of this article, the definition of "collection" is not a series of 20th century coin albums filled, or nearly so, with coins found in circulation over a span of 40 or 50 years. Rather, it is a collection of rare coins acquired from dealers and-or auctions over a long period of time.
    Even modern assemblages of coins bought at auction may constitute a suitable "collection" for auction.
    A few top-notch national coin auction firms have set the ground rules for rare coin auctions and today basically all, or nearly all, rare coins are bought and sold by auction. Often such coins create such a wave of competition that opening bids are far surpassed by several eager buyers, investors or dealers.
    Local coin shops today rarely have anything that is classified as "rare" except for the shop owner's personal collection or showcase coins. Thus, when a major coin auction is set, the dealers, investors and collectors eagerly scan the offerings, often online, for items they would like to buy.
    The recent Long Beach Coin, Stamp & Collectibles Expo auction conducted by Heritage Galleries of Texas grossed more than $12 million during the three-day sale.
    Such totals are not uncommon anymore. In the early 1980s, Bowers & Merena, another top-tier firm, auctioned the famed Garrett Collection from the Johns Hopkins University collection, and it grossed more than $15 million. The same coins today would fetch more than triple that figure if offered for sale.
    Most auctions are held in conjunction with a major coin show such as the American Numismatic Association annual summer convention, held in a different city each summer, and the ANA's spring show. The large, regional coins shows such as FUN (Florida United Numismatists), Long Beach and NENA (New England Numismatic Association) are a few of the regional coin shows that also feature top-level coin auctions.
    The firm selected for a major show auction will publish a glossy catalogue featuring many of the offerings in full color with a pedigree, if known, and other vital statistics to enhance the coins' values. Copies of the catalogs are mailed to all previous auction bidders and consignors, as well as many dealers.
    On the day of the sale — often scheduled for two or more days to cover all the lots in the catalog — bidders sign up to attend the floor action. Each lot is usually shown on a video screen, along with the auctioneer soliciting bids from the audience. Often a bid has already been tendered prior to the auction and usually becomes the opening bid.
    For the most desirable coins, the floor bidders usually outbid the mail bidders by 10-1. Each coin is examined by an expert or experts to determine its grade and special features.
    Most rare coins today are already encapsulated in certified company holders known as "slabs." However, slabs contain little more than the date, mint mark, denomination and sometimes an ownership pedigree. The premiere grading companies grade probably 90 percent of all rare coins, and bidders and collectors rely heavily on the grade assigned by these services.
    In addition to the floor bidders and mail bidders (known as "the book"), bidders often are on the phone with an auction house representative at the head table. Most auctions are also carried "live" online, and bidders who pre-register can submit live bids as the auction progresses.
    Due to the demand for high-end (usually older, extremely well-preserved) coins, prices often exceed estimates by a wide margin. One example of a modern rarity is the 1990 proof set with the cent lacking the "S" mint mark.
    Only a year or so ago, such as set would sell for $1,500 at auction. At the Long Beach show in June, two such sets sold for more than $3,000 each.
    Successful bidders have been known to submit the coins they bought at one sale to be auctioned less than a year later, netting well over 50 percent in the process. How long that can continue is uncertain, but as of now, there is no lack of demand (and money) for high-end rare coins.
    Because auction houses rely upon sources of rare coins, they try to entice older collectors (former customers of years ago), dealers and investors to submit some or all of their holdings for an upcoming sale. Estate managers often are solicited with very expensive, colorful, multi-page brochures outlining the auction process, the reliability of the auction company and the experience of its staff.
    As an occasional bidder at some of these major auctions, I accumulate some wonderful catalogues — along with lists of prices realized after the sale, and frequent solicitations for my coins to be auctioned. At many sales I buy nothing, as my objective is not to help set new high prices for any coins I'd like to buy.
    Today most auction houses charge the buyers a fee, usually of 15 percent, on the coins they buy. For large estates consigned to auction, the fee for the seller may be waived, or reduced to as little as 5 percent. For smaller consignments, the fee to the consignor may be 10 percent or thereabouts; the amount is negotiable. The terms of shipping are also negotiable; the auction house will send an armored truck at its expense to transport a large estate for auction.
    About 35 years ago, the late Charles Ruby of Fullerton consigned his holdings for sale to Superior Coin Co., another top-tier auction house. It took two Brinks trucks to carry the material. For a single coin of great value, such as the famed 1913 Liberty head nickel — now valued at more than $3 million — or the 1804 silver dollar — now valued at more than $5 million — an auction company will go to great lengths to promote the coin, offer door-to-door security, advance partial payment before the sale, and guarantee a minimum sale price and a minimum (or no) fee.
    For details about any major coin auction firm, go on line under "coin auctions" or search on any of the names above.

    Dr. Sol Taylor of Sherman Oaks is president of the Society of Lincoln Cent Collectors and author of The Standard Guide to the Lincoln Cent. Click here for ordering information.