Yes, I went there, I invoked Shakespeare to get your attention. This article is going to deal with how unrealistic it is to attempt to purchase coins sight unseen, even graded coins, via auction. Then, hopefully next month I will address selling coins via auction.
I have been dealing in coins for 30 years and consider myself as being someone who can grade fairly accurately. You should never buy a coin sight unseen via auction. The reason is simple, no one can accurately grade a coin by looking at a picture. I consider grading to be somewhat of an art form. When you grade a coin in person, you are generating a three dimensional image of the object you are holding. The light reflects off the surfaces so that you can properly assess how deep a bagmark is or if the lines on the coin are die polish marks or lines from a cleaning. When looking at a picture of a coin there is no field of depth to gather the extra information to accurately determine what the grade of the coin is. This is why it is imperative that if you do not know how to grade or cannot view the coin in person, that you have a dealer look at the coin for you to give you an honest opinion as to if it is accurately graded. Don’t be shy about paying the dealer a fee to do this for you. I guarantee that it will be far less expensive to pay a nominal fee, if the dealer even charges you, than to discover that 10 or 20 years down the road the coin you thought you bought for cheap money at auction is overgraded. We often have auction companies ship us coins on a client’s behalf to view them before bidding on them.
Lesson #1, coins bring what they are worth! Sometimes in the dealer world you will hear someone say they “ripped” this coin at auction. When this happens, and it rarely does, it is mostly because it was an overlooked variety. There are just too many talented dealers chasing too few coins for something to fall through the cracks and land in your lap. Sure you may bid on something and get it for 5% less than it is worth, but is it really worth the chance?
I must admit that I have on occasion not followed my own advice. I collect foreign coins just because I could never really afford US coins. I have purchased graded foreign coins without seeing them, but only after I have thoroughly researched them and have the option to return them if I do not like them. Although I have many more years of experience grading coins than most people reading this article, I am still somewhat gun shy when I purchase a coin sight unseen. The coins I buy are typically not very expensive and if I get stuck with something, I may lose $10-$100. Yet when buying US coins, a one point difference can mean hundreds or thousands of dollars lost. It doesn't matter what type of collector you are, whether you spend $100 or $100,000 on a single coin, what you spend is a lot of money to you and you should get an accurately graded coin. What I am about to say applies to most national level experienced dealers not the flea market steal coins from your grandmother brick and mortar type of dealer. The problems arise when a buyer thinks they are going to outsmart the dealer. I can’t make this any clearer, you are NEVER going to beat a dealer at his own game. You have to realize that they are experts and are in business to make money the same way most of you go to work for someone or may own your own business. If you do not allow the dealer to make a reasonable profit for their services, it is not worth it for them to deal with you. So when you have them look at an auction lot for you or bid for you at auction, pay them their fee. You are buying their years of knowledge and experience. Just because a dealer's product is knowledge, which comes from their brain, that does not mean that it is worthless.