Learn Why You Don't Want To Depend On Auctions For Rare Coins Directly At Rare-Coin.org
February 16, 2010 – While investors are searching for additional rare coins to add to their collections, some might be tempted to go to an auction looking for deals. After spending countless hours searching for coins at auction after auction, most serious traders come to the conclusion not to depend on auctions for rare coins.
There are a number of reasons why auctions are not the best source for serious buyers and sellers. First, buying coins at an auction can waste a lot of time for the investor. This is a slow process of going to an auction reviewing the pieces up for sale, waiting for a piece to reach the floor and then bidding it. For a seller, you can even add a couple of months to the process by waiting for payment to arrive.
Second, buyers will pay a high price; “sleepers” are going to be difficult to find as the house only makes top money if the rare coins sell for top money. Sellers, on the other hand, have no control over the prices they receive and the amount will likely come at a 10% to 20% commission, taking a big chunk of the profit.
Finally, there is always a risk of price traps, such as prices being controlled by the house (either artificially high or low), collusion with dealers or coins that have been graded wrong, either intentionally or unintentionally.
For investments that can be so important and costly, an auction is not the best place to sell or purchase rare coins. Using the services of a coin exchange provides the opportunity to deal with a company that has been evaluated by the Better Business Bureau, deals only in certified coins and uses its purchasing power to get the best prices, making it the best place for certified rare coins.
Shawn Penny
Senior Staff Writer - Rare-Coin.org
