What will be the future market for "problem" coins?

shirohniichan

I tried to buy some cleaned/impaired coins for some framed displays I was working on last year. What I found surprised me.

I expected to find huge price differences between problem-free and problem coins since the latter can't be slabbed and added to the PCGS Set Registry. While that was true in some cases (especially when buying from a dealer in person who acknowledged the problems), I found that I got a lot of competition from people who resold them as problem-free or who doctored them before reselling them as problem-free.

So the registry has made a huge difference in dealer buy prices since most collectors won't touch problem coins (except perhaps really rare dates that PCGS will not body bag) and honest dealers can't get good prices for them. However, when it comes to buying problem coins, the prices go near prices for problem-free coins because coin doctors and unscrupulous dealers can resell them as problem-free coins to those who can't tell the difference.

Will we see greater acceptance of cleaned and otherwise problem coins by collectors and a subsequent rise in prices, or will we continue to see big buy price differences between problem and problem-free coins when selling to dealers? Or perhaps we'll see the coin doctor business grow so much prices will rise even more.

What do you think?

[Edited to correct grammar]

kieferscoins

I think the prices will be a little lower than untampered with coins, but like you said - the problem coins can bring some good prices.

I think with NCS slabbing problem coins there will be a whole new area to buying and selling problem coins. The prices for NCS slabbed ones may reach the price for normal slabbed ones and the price guides may have to change.

Cameron kiefer

onthespot

I collect vintage marbles and a few years ago, polished or remelted or poly repaired marbles were a huge hush-hush/no-no, but as the repairers have gotten better, and marbles have gotten more scarce, it is much more out in the open now, and a whole lot of collectors don't mind buying polished/repaired marbles. (I still won't touch 'em though... to each his own.)

kieferscoins

Do they slab marbles?

Cameron Kiefer

gmarguli

What do you consider a "huge price difference" and what problems were you looking at? If you're expecting 50% off for a cleaned coin, then you won't get it. If you're looking for 75% off for a holed coin, then you might. I sold a 1900-S 50¢ in XF that was fire damaged. I got $12.50 for it when a problem free would go for $165 - that's about 7%. Rare dates also retain more of their value when they have a problem than a cleaned coin.

Other than the top pop coins, the registry has no real impact. The registry might have 1000 Morgan dollar sets registered, but I doubt that changed the price of a common date MS66 Morgan a single cent.

shirohniichan

So this discussion doesn't get off track, let me illustrate my point.

Let's assume an 1838 SL quarter currently sells for about $25 in Fine, $100 in VF and about $250 in XF. If I were to take a cleaned '38 quarter with XF details to a dealer, he'd probably offer me about $50 or $60 for it, telling me that collectors these days really don't like problem coins. If I were to put it up on eBay the bid would probably go over $100 because an unscrupulous dealer or coin doctor would figure he could resell it as a problem-free XF for around $250 and at least double his money.

Let's assume in the future that collectors decide some cleaned coins really aren't such a bad thing after all. Why spend $250 for the problem-free quarter in XF when they could get a lightly cleaned one with XF details for $150? Collector demand for these coins could push prices up.

Is the latter scenario likely? If not, why not?

Edited to add that I didn't see gmarguli's post before I posted this response.

cladking

The coin market has always severely discounted problem coins. This may be
understandable for a semi key lincoln with deeply carved initials but it makes
less sense for lightly cleaned key dates. These can always be worn down a
little to erase any sign that they were ever cleaned. The increasing prices for
these problem coins may be a growing realization that the market discounts
some of them excessively.

michael

for me i do not like problem coins i think quality eye appeal and original surfaces are the key weather it is a good condition coin or a superb gem unc.

a problem is usually always a problem an excuse, now i do not like them!!

and a problem coin if owned grows on you so to speak well at least from my limited experience in the coin game

i think problem coins will always be good to unscrupelous sellers and unknowledgable buyers until the buyers find out and then sell the coin at a loss and then the cycle starts all over again

now a damaged cleaned fixed holed corrorded etc. 1794 dollar and/or a 1799 cent well those are rare exceptions to the rules

sincerely michael

UncleJoe

eBay has created a market for these coins.

I think the "discount" will become less and less as the market absorbs these problem coins. Not eveyone sees "problem" coins as that big of a problem. Some of your older collectors and/or the purists (not meant to be derogatory) would disagree but times are a-changing.

Joe.

MadMarty

Remember, if it wasn't for problem coins AGC would have nothing to slab!!!

shirohniichan

I think the "discount" will become less and less as the market absorbs these problem coins. Not eveyone sees "problem" coins as that big of a problem. Some of your older collectors and/or the purists (not meant to be derogatory) would disagree but times are a-changing.

I find this statement a bit ironic. I consider myself an old time collector/ purist, and I don't have a problem with problem coins! I think it is the newer collectors and those who insist everything be slabbed by PCGS and NGC who hate problem coins the most. For example, I thought I got a great bargain when I bought a rare date gold coin with a lightly cleaned obverse for less than half the problem-free coin price. Why spend $1,500 for an AU-50, problem-free coin when you can get one with AU-55 to 58 details with only one side lightly cleaned for $650? If a coin doctor got ahold of it, he may be able to mask the light cleaning and get it into an AU PCGS holder, then the price would go to $2,000 or so!

I think the market may pick up if collectors get over their fear of problem coins. That is, if they can learn to accept scarce and rare coins with problems for what they are (and not try to hide the defects through doctoring), you'll see more people competing for them.

KoinKollector

There will always be demand for rare date or rare variety "problem coins", always. Then you have the people like Niichan said,who will buy problem coins and sell them off as problem free and the cycle will keep on going. Sure, somoene who can ID it as a problem coin will return it and the seller might list it as a problem the second time around, or he might not.

crito

There are plenty of lightly cleaned coins in PCGS & NGC slabs. Most darksiders care even less about light cleaning, to be honest. I guess with the emphasis on eye appeal, it shouldn't really surprise anyone. If the problem is minor and the coin looks good, no one cares. Could just as easily apply to Wayte Raymond album toned coins, since the mint never used that as packaging. Does anyone really care if in the future they'll be considered AT? nah, they look awesome and will command a premium for no other reason.

Elcontador

This is one reason why PCGS & NGC have bodybagged a lot of coins in the last several years. Unfortunattely, some of these coins are problem-free, but the grading services don't spend much time with any particular coin & if in 'doubt,' would rather err on the side of caution.

With more people "working on" problem coins, it's only logical that they'd try to increase their profits by having these coins slabbed by reputable grading services. The grading services are to some degree serving as gatekeepers from preventing this from happening.

I remember the "bad old days," and got burned buying some altered coins.
The coins doctors have improved over the years, and I see PCGS & NGC coins as a form of insurance policy against my getting stuck with these problem coins. Yes, some coins do get by the graders, and yes, I scrutinize anything I buy carefully before making the purchase.

There's a coin auction every other month in my area where many problem coins are sold. Some of them would be expensive type coins if unaltered in the grades at which they sell. Just as an example, I saw a 1920 P MS 65 FH SLQ which was cleaned sell for $300.

I don't have a problem with people buying and selling problem coins as long as full disclosure is made between the two parties.

crito

I'll take it one step further, not only do PCGS and NGC know these coins have minor problems, such as light cleaning, they net grade them without notation.