Why on earth do people consign bullion to an auction?
zski123
Posts: 256 ✭✭✭
I was just looking at an estate auction listing and it always strikes me as odd (being polite) that people consign their bullion coins or bars to an auction. It kills me to see these folks receive what amounts to something well below spot value while the auction house is cleaning up.
This past week I watched a 2006 Buffalo (Bus. Strike) sell for $1,100 with a 25% buyer premium totaling $1,325. The buyer paid a nice premium over spot while the seller receive only $880 after the 20% sellers fee was assessed. The auctioneer netted $495 on this single coin. They had five of these which all did the same. I'm certain the seller would have easily received spot at a local dealer.
I'm in the wrong line of work. I need to be a coin auctioneer.
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Comments
That is weird.... Most bullion will get spot plus a small premium.... Heck, it could be sold on the BST or Precious Metals forum for that much....Cheers, RickO
I known of a local auction house where the consigner is the OWNER of the auction house. The owner will put coins in the auction with a reserve just under fair market value but with buyer's premium, the value would exceed what he could get by selling to a coin or bullion dealer. Most of the time for gold coins, the coins will go unsold but sometimes bidders will run up the final price.
Night Hawk
I go to many local auctions. In one case as above, auctioneer is mixing in his own personal coins during the auction. Many other cases where it's an estate with a clueless executor. They know nothing about coins or bullion and could care less, they just want $$$$ and fast so they can go shopping.
The whole worlds off its rocker, buy Gold™.
get a bunch of rubber tree plants to put along the back wall
Most people are just clueless about numismatic coins, bullion coins and bullion prices. Most people probably can not tell the difference between a numismatic coin and a bullion coin.
So, you are saying that the auction house charges a both a 25% buyer premium and and 20% seller premium? That is almost half of any auction winnings.
Well, since the world paints dealers up as the biggest "rip-off" artists of all time, people believe. So the auctioneer will rip them more, and smell better at the end of the day.
Most people, who are not collectors, who are selling off estates, simply want to get the money out of the money out of an estate when they are selling it. Therefore they consign the bullion. Sure, they might get more if they found the right buyer outside of the auction realm, but that requires knowledge of the buyers and extra effort. For most people it’s not worth the effort.
I bid on a Gold Eagle last night at Heritage last night. Reverse had been smoothed and imprinted. Fairly long lot description and the coin sold for melt.
Lot of work for little return.
These coins and bars were inherited or otherwise acquired by unknowledgeable people and they just don't know any better. Simple as that.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
my wife and son would inherit my bullion stash on my passing......neither has a dime invested in it so that whatever they get is pure profit
I sold lots of silver dollars to an auction owner.
That's standard in most auctions. It's a terrible way to sell bullion and even rarities.
Have them give me a call. By the way...How old are you? How ya feeling these days? Just kidding
^ This is the correct answer.