Estate Sales and Auctions
In my current business, I am able to buy inventory from estate sales and estate auctions. Most estate sales are either the lifetime accumulation of a deceased loved one or a forced sell-off of assets mainly as part of a court-ordered restructuring. An estate sale company will come into a home, stage it for a sale, add prices to everything and open the house for the public to buy what they want.
Adding prices mean tagging the items with a price that the company running the estate sale thinks is a fair price for the item. This tagging also has these sales also called Tag Sales. When it comes to tagging, some companies are better than others. After they pick the better items, the rest of the house is tagged either at prices too low or prices too high because most of the estate sales company do not know about the items they sell. They might use an average price of similar items they sold in the past or they just pull prices out of the air.
Estate sale companies have little to know expertise with coins and currency which is reflected in their prices. I cannot tell you how many times that I have walked into an estate sale and seen common date Morgan and Peace dollars priced at over market value.Unfortunately, many of these companies are not interested in learning about how to price coins. During a recent estate sale, I found quite a number of Walking Liberty half dollars. Most were in the VG-XF range. Some were better dates but none were the 1921 key date coins. Using the Numismedia Fair Market Value pricing guide I came up with a bulk price that I feel was fair for the entire lot. Unfortunately for the company, it was less than 50-percent below their price and about 20-percent lower than the fair market value. I am a reseller and I need to be able to make a profit. The manager on site acted as if I told him his baby was ugly.
When I presented my offer, I told him that I understood the coin market and would explain how I came up with the price. I showed him the Numismedia Fair Market Value pricing guide and explaining that it is a retail price guide. Confused by the differences in grade pricing he questioned how to grade coins, I show him the condition of the coins compared to the images in the PCGS Photograde app. After being confused by everything he said that he would take a chance on his price and turned down my offer.
I returned to the estate sale on Sunday afternoon about a half-hour before closing and noticed that none of the coins sold. I lowered my offer to a small percentage above its melt value. The offer was declined. A week later I found out that the coins were brought to a local coin shop. Imagine their surprise when they were offered a price between my two prices.
If you go estate sale shopping for coins, be prepared to be patient. Even though it is not their merchandise, they act as if it is their personal property. Most will be reasonable if you are reasonable with them. I would recommend reviewing the “Negotiating” section in my post “How Are Coins Priced (Part II).”Estate auctions are very different than what most people are used to if their only experience has either been at coin shows or eBay. If you attend a live estate auction, there is a possibility to purchase bargains. But like any auction, two people can also drive the price of the coin higher than fair market value. Most auctioneers understand how coins are priced and how bullion-based coins should not sell below their current melt value.
In my experience, gold and U.S. Mint packaged items usually sell at prices greater than fair market value. I cannot tell you why a 1977 Proof Set would sell for $15 when it is valued at $8, but it happens at these auctions.
If you are not involved in this market, there is a world of online estate auctions that hides in the open. Online estate auctions are hosted on sites that are not quite well known outside of those of us who work and shop in this world. These auctions are simply a company imaging and posting the inventory online, managing the auction, collecting money, and making sure everyone is paid. Most companies will hold absolute auctions that run for 7-10 days with all items starting at $1.00.
For those who do not know, an absolute auction is one where the lots sell at whatever the price is when bidding ends, also known as the hammer price in reference to a hammer that is used during live auctions. Winners will also pay a buyer’s fee which average 15-percent of the hammer price.
Although it is possible to find bargains in these estate auctions, many times I have seen numismatic items sell for more than fair market value. This is not good if you are a re-seller but sellers are doing well.
Antique Shows and Flea Markets
I go to a lot of antique shows and flea markets. I will set up a table at a few flea markets in a month and do a big show at least every month. One big I regularly participate is D.C. Big Flea, the mid-Atlantic’s largest antiques show and flea market. The show attracts 400-700 vendors, depending if they can use the entire center, with a variety of antique, vintage, and collectible items.Although I will buy and sell some numismatics, I do not bring numismatics to these shows mainly because they do not sell as well as other items. But when I have a chance to walk around the tables, I can find a number of cases with numismatic items.
Buying numismatic items at these large shows can be problematic. One of the biggest problems is that the vendor might have bought the item at full price and has overpriced it to gain a profit. There was also the time that a vendor had bought a roll of American Silver Eagles, placed them into AirTite holders and was selling them at a premium similar to the collectible Eagles struck at West Point with the “W” mintmark. When I questioned his prices and showed him that he was charging a 100-percent markup based on the per-roll price at a known distributor, he bluntly told me how unhappy he was with my questioning.
Most dealers will not try to swindle you based on a false narrative of value. In fact, many appreciate the education including the pointer to online resources. They will negotiate, and if you are fair with them, they will be fair with you. Sometimes, you can find items that you might not see on a bourse floor. During the last show I attended, one dealer had a case with a lot of German Notgeld, most in Extra Fine and Uncirculated condition.
During a previous show, I found a dealer who emptied boxes of tokens, trinkets, buttons, and medals on a large table. It was a treasure hunter’s dream! Although I did not have time to do an extensive search, I did find a few small New York-related items that I had never seen before including a merchant token for a business I know existed into the 1970s.
Although estates sales and auctions, antiques shows, and flea markets could present problems because most of the dealers are not as knowledgeable, if you come armed with knowledge, patience, and be on your best behavior, you can find some good bargains.