How to Value Problem Coins That Are Truly Rare
erwindoc
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I try my best to stay away from problem coins and I think most seasoned collectors would feel the same. However, some coins are just absolutely hard to find in any condition. Unfortunately, some of these have been lightly cleaned or in the past or have other issues (rim damage/scratches/harsh cleaning). How do you value these rarities? I'm not necessarily talking about key date coins that are always expensive and available. I'm talking about coins that may only come up for auction a few times a year or less.
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One example of this kind of rarity is the 1802 half dime. There are about 35 known, and at least 75% of those are damaged in some way. How do you value them? I've found it is best to consult an expert in that series, whether that is a dealer or a collector.
An authorized PCGS dealer, and a contributor to the Red Book.
Advantage of the collector over the dealer is that you can be wrong and right at the same time. Valuation does not need to be accurate if the coin is important to you and you hold the collection for an extended amount of time. Make sure though that the problem is something that you can live with. Holes and post mint rim problems make my no go list.
I would think that if the coins the OP is wondering about come up “a few times a year or less”,
then holding out for problem-free coins is called for.
Yes, you may have to wait a while for the right coin, but a ‘problem’ coin is not YOUR problem unless you buy it.
30+ years coin shop experience (ret.) Coins, bullion, currency, scrap & interesting folks. Loved every minute!
I avoid problem Coins at all costs.
There is nothing that I collect that isn’t available in problem-free condition given enough time and funds.
Sometimes, it’s better to be LUCKY than good. 🍀 🍺👍
My Full Walker Registry Set (1916-1947):
https://www.ngccoin.com/registry/competitive-sets/16292/
One of my favorite coins, that is relatively rare, is this Bechtler gold coin I got from Kagin. I told him I was looking for an affordable Bechtler coin at a coin show and a few weeks later he emailed me with some pictures and a nice price. I bought it right away, for about 1/2 of a problem free example. I love it, these pioneer coins don’t have any fancy designs and I don’t think how it looks matters as much as the state of preservation and color. I’ve heard that sometimes the Bechtler’s small thin coins like this one had to be removed from the dies with pliers and would get damaged. I also imagine the Bechtler’s shooting their shotguns at some of their coins for fun that might damage them. Most likely this is damage that occurred much later by someone else, but you never know 😉
Mr_Spud
I recall watching a Antiques Roadshow where the appraiser (not coins) was saying that for manufactured items made in large quantities, condition is everything, while for very rare or unique items it becomes much less important as the item gets rarer and rarer. in other words, if one is available in better condition, it devalues the o0ne in poorer condidtion.
Prior auction results and your best guess. There's no formula as some problems are worse than others and some people hate certain problems.
As a personal note, I will not buy tooled coins. I may buy holed coins but rarely. On the other hand, old lightly porous coins or lightly cleaned coins don't bother me that much.
It’s an area in the problem coin dealer domain.
I knew a problem coin dealer (real sharp guy) that was expert on that but believe he is deceased. My table next to his at a show one time and was amazed how many people buy those.
Perhaps there are other problem coin dealers out there.
I would go with the reckon method. Just ask what you reckon the piece is worth.
Great spirits have always encountered violent opposition from mediocre minds.-Albert Einstein
I was a big buyer of problem coins for a while. I justified it to myself by saying, "I'm paying only 30% the cost of a problem-free coin and this example has the same history. And, most coins have been at least slightly cleaned at one point."
That said, the market is the market: I lost money on most of the problem coins I bought but it was fun owning coins which were otherwise out of reach at the time. Ultimately, if someone can afford a $20K messed with coin, they could probably afford a $60K pristine example if they waited long enough... and, the market consistently prefers quality, making the higher price justifiable for a "problem free" coin.
So, it depends on the price tier, the type of problem, and the true level of rarity (a slight cleaning isn't as big of a deal as a retooled coin).
But if you love the coin, buy it and keep it - who cares what the market thinks!
That is the fun and challenge of collecting unique and rare items. In the ends it's just a guess and a function of a) how bad you want it b) how bad the other person wants to sell it c) how big your wallet is and d) how many other people want it. Historical sales can be a starting point, but that's all it is.
Let's take my example of the 1802 half dime. A damaged Fine is about $40K. An undamaged one, if you could fine one, is about $160K. There are many people who could afford a damaged one who could not afford an undamaged one.
An authorized PCGS dealer, and a contributor to the Red Book.
I buy problem foreign coins of historical interest for my type set of foreign coins that circulated here, if they are very scarce. And only if the coin has a very light cleaning or circulation damage. For example, I have an 18th century 4 real with a slash on the reverse. Why would I care? It actually looks cool. I also buy scarce colonial type that might have a small hit or light porosity. I buy all these slabbed, very rarely raw, which adds to the scarcity. I have zero problem Federal US type as US type are readily available, with only a few exceptions. (I might have to make an exception for the half disme.) Pricing is a crapshoot even when many of these coins are problem-free so I use all the usual methods and make a best guess. Fortunately, prices tend to be low, little downside.
I retained the coins to have a nice type set. For 30 years avoided problem coins which limited me to 1800-1930.
Now that I want earlier 179x stuff and seeing price difference more open to details grade.
A cheap bit of tuition via a scarce Large Cent taught me to avoid problem coins.
BST: KindaNewish (3/21/21), WQuarterFreddie (3/30/21), Meltdown (4/6/21), DBSTrader2 (5/5/21) AKA- unclemonkey on Blow Out
There are many rare die varieties only known with problems, so you have to accept the problem and enjoy the rarity. Granted most of these are R8-R7+ coins but sill go for huge money.
-> looks in wallet -> yep that is what it is worth.
I just try to avoid them, and I don't care if they are rare. It may be fun to afford an R7 coin, but the tables will turn when you try to sell and you realize the buyer for that coin is R9.
I am a newer collector (started April 2020), and I primarily focus on U.S. Half Cents and Type Coins. Early copper is my favorite.
Agree.
A few times a year doesn't = a coin that is actually that hard to buy. Less could = anywhere from oncee per year or noticeably less which could be very to not so difficult.
As this is the US coin forum, there aren't that many selling this infrequently, unless it's in a specific quality or some specialization. Those that qualify are concentrated in a low number of series.
This coin is still charming. I feel gold coin collectors often have a larger budget that non gold collectors. The gold collectors, who will consider coins with issues, will be less hesitant paying more for a rare desirable coin like yours.
It took a little while to get that one, but glad I did!