By Joseph Presti, Esq.
The old adage is true; you get what you pay for. Everyone likes a bargain but you have to ask yourself why would a coin that lists for $500 wholesale sell for $500, while similarly graded coins may sell in the same auction for 30% or 40% more? The answer is simple, all coins in the same grade are not created equal.
Our mantra has been and always will be to buy the coin and not the label. I have been attending major numismatic auctions since I was 15 years old. The one thing that has been consistent is that all major buyers look at the coins to be auctioned and will not bid on the coin blind or without looking at the coin for themselves. The reason for this is that coin grading is subjective and subject to personal interpretation. The grading services have done a good job of tightening up that subjectivity, but all they have done is created a floor for that particular grade. Any reputable dealer will tell you that there are premium quality (PQ) coins in all grades. That is the reason most dealers will tell you that they need to see a coin before they will give you a buy price. This is done to protect both buyer and seller.
If you see a coin in an auction catalog that interests you, the best thing to do is to call a dealer that you have a good relationship with and ask if they are going to attend the auction or know anyone that will be. Have them actually look at the coin and then bid accordingly. Keep in mind that there are VERY rarely any bargains, especially in a well publicized, well attended auction so be prepared to step up and bid accordingly. Often times the actual auction room may not be well attended. You can bet your last dollar that all major dealers have examined the coins and are bidding via the book or internet, but the key is that they have looked at the coin.
The next trap that you must be aware of is not to get caught up in a bidding war. Set a price in your mind and stick to it. If you aren’t successful this time, chances are that a comparable coin will become available in another auction or on the bourse floor. Just because a coin is being auctioned does not mean that it is a better deal than a similar coin in a dealer’s inventory. Remember that if you buy a coin from a dealer it should come with a return privilege, which is not the case when you buy at auction. I can’t tell you how often we go to coin shows and are much more successful buying high quality coins on the floor rather than at auction at much lower prices.