BUYERS-Do you trust major auction houses?

bullseye

I think there is some shilling going on. Recently at a major "name" auction I was told there were no reserves. Yet, I heard the bids were opening right below the owners costs. Now, I see a big dealer who apparently purchased the coins and is selling them practically for what they paid. I had never seen them do that before. I don't understand how that can happen. I guess its not illegal, but isn't that cheating?

What does everyone think? Maybe I'm wrong about the feeling I'm having. I thought I could trust the big guys. I always wonder if I get run up at these big sales.

wam98

No comment

JrGMan2004

<< <i>No comment >>

darktone

If someone is going to shill you on a $20 ebay coin I thinks it's safe to assume you will be shilled on $20,000 coins. Just know your limits before you bid.

littlejohn

No comment

BASEagle

Bullseye,

Tell me if I'm wrong, but isn't it possible that shill bidding can go on without any participation from the auctioneer? A couple of sellers can get together and agree to bid up each others lots - maybe the auctioneer will notice whats going on - but with thousands of lots, maybe he won't notice. If the shills get stuck with the coins, the auctioneer still gets his commission, so he doesn't care. But, if an auctioneer confronts a shill, the shill can always claim that he seriously wants the coin. Since the auctioneer isn't a mind reader, there's not any way to stop it.

Maybe I misunderstood your post, but you seem to blame the auctioneer for shill bidding. Please explain how an auctioneer can prevent it.

Mike

tradedollarnut

What's worse - shill bidding or bidding against the potted palm in the back of the room?

BAJJERFAN

In the two instances where I bought pricey [for me at least] coins from a Sig auction it was amazing that the bidding ended one increment below mine. If smoeone else wnted it THAT bid one more bid woulda done it. If my max is $4K and current bid is $3K I wonder if they start the floor or potted palm bidding at the next bid AFTER $3K or the next one BEFORE $4K. Looks like if one is willing to pay strong money smoeone makes sure that you do. In the one case I recently but regrettably sold the coin for a nice profit and the other a 94-P Morgan in PGGS62 I still have and it has gone up in value quite nicely.

Proof

I can only think of one major auction company that I trust, ANR.
All the rest I am skeptical about. Even though I do not have concrete evidence, there have been many instances that I thought 'something was just not right'. I guess all I have is a gut feeling about these companys.
I do sleep better at night when doing business with ANR.

Shamika

<< <i>Yet, I heard the bids were opening right below the owners costs. >>


Sounds more like a reserve price as opposed to a shill bid.

gemtone65

Proof: Why do you trust only ANR? Have you ever bought a coin they highly touted from their auction and then tried to sell it to them? Try it and see if you feel the same way.

mrearlygold

<< <i>Proof: Why do you trust only ANR? Have you ever bought a coin they highly touted from their auction and then tried to sell it to them? Try it and see if you feel the same way. >>








Why would you buy a coin from there auction and then try and sell it to them? What's the point? They aren't a mega mega retailer/wholesaler of coins ( never were) and they don't pretend to be one .


Tom

orie

coinguy1, aka pollyanna

mgoodm3

I just got a coin from the sig auction and paid $200 less than my max bid.

BAJJERFAN

<<"Bajjerfan, I have frequently bought coins out of Heritage sales for considerably below my maximum bids which I had placed over the internet (or otherwise) through them. I am convinced they do NOT do what you wondered about.">>

Good enough for me Mark. Thanks.

gemtone65

There are a variety of reasons for wanting to sell a coin back to the auction house. In my case it involved a multiple coin lot, and I was not interested in all the pieces in the lot. By the way, this lot was from the Koshkarian collection. When I offered one piece form the lot back to ANR, they didn't even bother asking what price I wanted. They simply had no interest.

As for other major auction houses, I've dealt with Superior, Heritage, the Goldbergs and ANR, and have not had any auction problems. There are, however, several problems that could arise that you should be aware of.

Take reserve prices, for instance. In a Superior sale, an internet bidder cannot know what the reserve is. Thus, any bid submitted may not realize the reserve -- you are not told that information when you submit your bid. Last year I lost 2l pieces because my bid was aceepted, but the lot didn't sell and I did not learn about the higher reserve until after the sale.

Another situation arises when there are few mail or internet bidders prior to the floor auction. The problem for the auction house is where to start the bidding. If there are at least 2 such bidders, the proper approach is to start the floor bidding at one increment above the second high mail/internet bid. Whether or not all companies follow this approach is not clear.

A related problem occurs when there is but a single mail/internet bid. Where should the floor bidding begin? Some auction firms might start the bidding at one increment above the single mail/internet bid. This is entirely improper, and so caution is advised in these cases. It seems to me that bidding should begin one increment above whatever the pre-announced initial price is, or possibly at 70% of the wholesale price.

Usually, with some difficulty perhaps, you can work your way around these pitfalls as long as you know what the auction house's procedures are. Unfortunately, this aspect of the auction format is not well documented, so possibly a call to the company would help clarify these matters.

lloydmincy

Wait a minute:

I don't understand (really) the big deal. I don't understand why shill bidding is even WRONG!!!!! THE WINNER IS WHATEVER THE FINAL CLOSING BID IS ABOVE ANY RESERVE. PERIOD. If someone is pushing a price of their own coin (somehow) higher with "other freinds" bidding or whoever, and no one else bids... they are stuck purchasing the coin, with the 15% commission. I don't believe this happens much. If YOU were the last bidder of a coin that was "pushed" higher by a cosignor's "friends", well, YOU WIN THE COIN BECAUSE YOU BID WHAT YOU WOULD PAY FOR IT!!!!

I dont get it. You DON'T HAVE TO BID ON A COIN YOU THINK IS PRICED TOO HIGH. ???

Bullseye: You are saying your expereince was "noticing" some lots had no reserves, but opening bid was BELOW the consignors cost. ??? Wouldnt that be nice lots to bid on? And then you said some dealer bought them, and is selling them at cost??? I'm confused. Couldn't YOU have purchased them at the "basement" prices instead of the other dealer???

In terms of shilling, is the WRONGNESS of this making the coin SEEM like it is getting bids, and puts your mind in a euphoria mood to bid higher??? If that is what is wrong about shill bidding, then you need to discilpline yourself more with the bidding process. Right?


-----Lloyd

lloydmincy

on another note, I think some of the auctions/eBay or whatever, may SAY there are no reserves, when in fact, maybe the auction sight ITSELF bids on a coin close to a sellers cost, basically saying, "heck, we'll buy the coin if it doesnt get bid on..." Could be a number of reasons you saw what you saw, bullseye.

Or...

Sometimes a dealer takes a look at the lots, and bids on MANY of them, purchasing maybe a bunch of the lots, because no one bid higher than him (her).

orie

The real game. I have a 20 coin consignment and a few dealers know I’ll play ball. A dealer/agent comes to me and says he has a client(pigeon) new to the coin business who wants some coins in the 20/30k range. What do you have? I have a very low end MS66 that’s worth around 18k. Dealer says I’ll take it for the 18k and will give me 30% of what the coin brings over the 18k. Dealer/agent buys the coin for 26k and his new client just got a great introduction to the coin hobby.

I get an extra $2,400
Dealer/agent makes $5,600 plus his 5% comm on 26K
Client gets ripped for $8,000

michael

buyers do you trust major auction houses?

based on first hand personal experience and also close second person experiences

NO

now i am sure there are some good ones that are reasonable and i have yet to experience as such but tomorrow is always another day filled with hope and promise

scher

I suppose anything is possible but I have been on all sides of this issue have bought meny coins way below what my max entered bid was and also been completely blown out by triple or more of my max bid..as a recent seller of a fairly large collection that had no reserves on most lots I saw many bids jump at the last of internet bidding to levels way below my costs and to crazy multiples above my cost I think its like Lloyd said..if it seems a good deal some people want it some are trying to fill a hole others think they have buyer or want to try and crack the coin..its just all over the place..I talked to good sized dealer that bought a few coins out of my sale and asked what his bidding thinking was as he paid 20k more on one coin then another that had to me the same value..he said he wanted em both and felt he got the 1st coin at a great deal so he didnt back off on the 2nd coin..I also witnessed a real determined bidder that just wouldnt put his paddle down on several high end commems, I think this practice shuts a lot of folks down because they feel he wont back down so why even try, thus that determined guy might get a break on some live bid lots..
Bruce Scher

coynclecter

Trust??
what does that mean?

Will they cheat me......No

Will they use the information I provide to thier best advantage....yes

If its a coin they own and they know I have a max bid of 500 , I won't be getting it for 350. If its a consignors coin then that a different story. If a coin is worth a lot will they underemphasize it, bid against me and resell it later.. yes

Will they overgrade thier own coin and lower grade the consignors, maybe to buy it cheaper........possible, its not illegal

If they are not an independent and are competing against thier own consignors and bidders then thier advantage is great and the methods are not illegal but highly advantageous to them. Having them buy and sell in thier own auctions without disclosing is a total violation of thier fiduciary relationship and is like getting into a boxing ring with the referees son.

northcoin

In the fine print (at least for Heritage auctions), it is disclosed that the auction house may bid on the coin itself. I guess this could be abused in the same way that having someone in the seats do the shilling.

coinvet

Now it's all coming back to me....

Many years ago I bought lots of overgraded cleaned coins from a Little outfit in a small town in New England. Much later I realized I had blown my paper route money on garbage. I learned and moved on.

Today I buy 4-5 figure coins from auction houses, they are professionally graded and everything seems on the up and up.

Or is it.

I too can tell stories but who knows?

The coin hobby, you gotta love it!

Conder101

<< <i>I don't understand (really) the big deal. I don't understand why shill bidding is even WRONG!!!!! THE WINNER IS WHATEVER THE FINAL CLOSING BID IS ABOVE ANY RESERVE. PERIOD. If someone is pushing a price of their own coin (somehow) higher with "other freinds" bidding or whoever, and no one else bids... they are stuck purchasing the coin, with the 15% commission. I don't believe this happens much. If YOU were the last bidder of a coin that was "pushed" higher by a cosignor's "friends", well, YOU WIN THE COIN BECAUSE YOU BID WHAT YOU WOULD PAY FOR IT!!!! >>


You don't have a problem with shill bidding? Well suppose there was a coin that you were willing to pay $2000 for. It come up for auction and no one else there is really al that interested in it so they only bid it up $800. It should be yours then at say $850. But the owner has a shill bidder keep bidding you up until you finally win it at $1950. Your happy aren't you? After all you got it for less that the $2000 you were willing to pay. So what if it cost you $1100 more than you should have had to pay for it, you don't mind because there is nothing wrong with shill bidding. HEY SELLERS!! Here's the guy you've been looking for. The guy who doesn't mind paying his maximum bid even if he doesn't have to.

lloydmincy

CONDOR101:

Good example, BUT HOW DO THEY KNOW I WOULD BID TO $2000? WHAT IF THEY JUST GOT STUCK WITH IT AT SAY $1800?? ARE YOU SAYING THEY CAN SEE MY MAX??? PLEASE EXPLAIN HOW THIS COULD POSSIBLY GUARANTEE THEM NOT STUCK HOLDING THE BAG?

I NEED ANSWERS NOW!!! IF I LIKED A COIN AT $2000, BUT IT WAS ONLY AT $800, WHY WOULD I KEEP BIDDING AGAINST JUST ONE PERSON UP TO 150% MORE FOR A COIN???

NO one EVER knows my maximum bid, becasue it is only in my BRAIN, so how could the shiller be guaranteed not to be the buyer??? What if I gave up at $1700???

bullseye

I started this thread about shilling at the major auctions. I just wanted to know if other people thought it was happening.

Sure, a coin could still go cheap, but it could go cheaper if there wasn't a shill. Isn't that cheating?

I was at a major auction last year where there was no reserve on a coin. Apparently it was a dealers coin. He had his friend running it up to the point that the auction director called his bluff by acting like there was a higher bid, then saying he made a mistake and publically (at the sale) offering the coin to the bidder who declined. I thought that very interesting because he bid it up. Do these guys think we're all stupid?

Recently, I attended a major name auction and saw what I thought was hany panky by the auction company, the consignor, and a dealer (it looked like a love triangle). Even if I'm worng, I'm not the only one who saw it and it just plain looked bad.

I know when I sell my coins, I want the auction company to say "no reserve" and I'll have my friends in the room bidding. Its seems to work for others. I like auctions, but I don't like what I think I am seeing lately.

Conder101

They don't know, and they do run a risk shilling it up. I never said there was any guarantee that they wouldn't get stuck with it. Just that if they do stop before you maximum was reached they got you to pay a bunch more money than you should have had to pay. In effect the shiller has stolen from you the difference between what you should have had to pay, and what you actually paid. Yes sometimes they will get stuck with the coin, but they just sell it again. In the long run they try to and probably do make more from the stolen shill amounts than they lose to the buyer premiums for the ones they get stuck with.

As for why you would keep bidding on a coin when only one other person is bidding against you, oh I don't know, how about the fact that it is still less than what you were willing to pay for it?

majorbigtime

I've heard a lot of horror stories,switching consignors" coins, etc.

I recall Julian Liedman led the charge against one of the big auction houses in California for trying to screw an estate years ago.

ER

lloydmincy

Michael: (condor101)

Good. You make total sense, and shill bidders I guess can get away with it. But if they kept losing, and had to keep paying the
buyers fee, seems this would sooner or later be a losing game. If it is happening, it has not happened to me. (Yet).

To tell you the truth, based on prices realized and what I bid on the Hugon Barber coin sale (Heritae FUN), I was a shill bidder on a lot of the big ones in that sale, BUT DID NOT MEAN TO BE. The MS68 1913-s would have sold for about $50,000 less had it not been for me bidding. I bid 1/2 hour before closing on Heritage Internet when it was standing at $90,000. I bid up to 140,000, and $150,000 was then teh next high bid before the floor. Opened at the floor at $150,000. It was never bid again. Closed at $150. There sere quite a few like this from me. hugon should pay me something!!!

I guess we should keep our eyes and ears open. If any wrong-doing going on, it should be EXPOSED, and the names of the culprits spread on these boards. Isn't that one of the reasons for these forums?

---Lloyd

lloydmincy

Bullseye:

In your latest example, how could the "shill bidder" say he didnt want the coin, when he was the high bidder with no reserve? Are you telling me these guys can try to bid a coin higher, then walk away from it? ??? Can't be true. If that was the case, why wouldnt we ALL shill on our own coins!!!???