Tips when it's time to sell a collection...
Purfrock
Posts: 545 ✭✭✭
I’m many years away from selling my collection (at least I hope), but I was thinking about some of the issues and decisions I will need to consider for when that time arrives. I realize the question might be difficult to respond to without some numbers attached, so let’s say the collection contains approximately 1000 coins, and it is estimated to be in the $350,000-400,000 range, with all but a couple of coins being sub 10k.
So here are couple of questions I hope some of you could help me with (and I apologize if this has been covered in another thread – I searched and nothing came up immediately).
Is there a significant benefit of consigning with one major auction house versus breaking up a collection according to value and selling at what you feel is the most appropriate venue?
How important is the tax consideration when selling, and should it be a significant factor when deciding to sell all at once or over several years?
When negotiating a consignment, what piece (%) of the buyer’s premium can a seller hope to share with one of the major auction houses?
If you like/don’t mind keeping your coins raw while you own them, is there a financial benefit to waiting to have them slabbed by the auction house versus doing it yourself?
That is about all I can think of for now, but any other insight would be welcome. As I said, this is hopefully years away for me, but I like to be prepared in case of a major life change.
Regards
Comments
Better to do it yourself if you can tolerate having your coins in slabs. That way, you'll have the chance to resubmit any undergraded or misattributed coins. Can't count on the auction company to do that for you, especially if you're gone.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Couple things: there is no better time to sell a coin than when you have an eager buyer willing to buy (even if your not ready to sell then. Sometimes, if you wait, those buyers have long moved on.
If my collection consisted of lots of lower value raw coins, as well as the nicer stuff, I would holder the nicer stuff, possibly auction it off thru one of the companies that you mentioned, then sell the lower value stuff at a show or thru a dealer that specializes in that sort of stuff. Shop around and use several dealers that specialize in the material you have, Don't always all have to go to same person.
Your tax adviser would best advise you on that, I couldn't sell all my stuff at one time, or I would get hit with a huge tax burden in one calendar year(even with purchase receipts), and my collection is worth no more than the figures you mention in the op.
the better your stuff the higher percentage you'll get I'm sure.
more to come (somebody came in)
I recently sold a part of my collection in the low 6-figure range. Before doing so, I took a little more than a year researching my options. I'm no industry expert, but I can maybe give you a few ideas to consider.
First, realize that while there are lots of nice and helpful folks in the auction and dealer world, nobody cares about your collection, the size of your check, or your time as much as you do. The more effort you're willing to put in, the more money you're likely to get back. This is one drawback to the "auction house does everything" approach. Of course, auctioning everything in one swoop is the easiest route and the one your heirs will likely take if the collection outlives you. If you do go with that option, understand that the seller fees should be waived and you should also get a significant part of the buyer's fees. They will not offer this without asking. EVERYTHING is negotiable and a collection that large should merit favorable terms for you.
Second, talk to an actual CPA before making any decisions. Tax advice from the Internet, even when well-intended, is no substitute for a professional who understands your actual financial situation.
Third, if a large part of the collection is raw, it will take some effort to figure out what should be graded, what should not be graded, and what should be run through three or four times to get the "right" grade on the holder to maximize your return. Doing this takes an up-front investment of time and money and eventually you reach the point of diminishing returns. I spent 6-8 months working with a dealer to run the coins through the appropriate slab and sticker companies to get the best possible price. Sometimes you're better off selling a coin in an older, lower-graded holder than in a brand new holder at a higher grade..... It just takes experience to know which thing is likely to be best. Fortunately, the dealer was able to find a willing buyer and get a fair price. He also earned a fair commission which I'm happy about. It was a surprising amount of work we both did.
Finally, with a collection that large, you might consider paying for a table at a larger show. You'll have to have your go/no-go price for each coin nailed down ahead of time, but it might be a fun experience. Retail prices will always be better than paying commissions or auction house fees. There are security concerns, tax implications, and other odds and ends to consider with this option.
You get a large benefit by selling off a small portion every year vs doing it all "when the time comes". I have had some coins take three years to sell and get a great price, vs auctioning them and taking peanuts.
Sell into strong markets. Which of your coins are in demand now? Those are the ones you should sell first.
What is the future outlook for the type of coins you now hold? Does the future look bright or is decline over time likely. If decline over time is likely then the time to think about selling is now, not then.
You may want to ask a knowledgeable friend to help with the selection. You may find that you love some of your coins too much and can't view their marketability objectively.
Personally I think that selling a coin here or there has made me a better buyer....
I'm a box of 20 guy and can't even comprehend owning 1000 coins...if you really want to understand what is the best option for you...I would "test drive" the major sales venues by giving them a dozen coins each: GC, eBay, consign to a dealer, Heritage, take a table at a show...see what works best for YOU in terms of prices realized, time involved, hassle etc....
Thank you for the responses.
To clarify regarding taxes, those people that sell all at once through an auction house only need to pay taxes on the capital gains, correct? How much documentation is required? If I did sell 1000 coins, must I itemize each one and provide proof of my purchase price along with the auction sale price? I do document each purchase, but I rarely keep receipts.
It does seem that selling the collection slowly may be the better option when the time comes (assuming I have a choice). I do appreciate the catalogs and nice photos that the big auction houses provide to hype a collection, but I don't know if one outlet can consistently bring top prices for a diverse set of coins.
You don't need any documentation....... unless you get audited.
$400,000 divided by 1000 coins equals an average coin value of $400? Sounds like Ebay or GC or taking a table are your best bet...
You may consider consigning them to a dealer you have trust, for a % less than an auction house?
This way there is NO table fee or other expenses to pay!
@Purfrock ...
As noted above, there are many details to consider when disposing of a collection. These details are necessary if you are concerned about return on investment. One other concern is likely that your heirs not be scammed. Both can be avoided if you sell the major portion of your collection while still here....Perhaps only keep a limited few (i.e. a box of 20) with complete documentation and instructions to contact a trusted dealer (arrange ahead of time) for disposition. Just suggestions... Cheers, RickO
The "rent a table" idea has merit, and it has passed through my mind from time to time. You have to do you homework before the show, but of greater concern is the dealer experience.
Dealers will descend on a new face at a show, some of them will be very intimidating. You will need to be prepared, to hold you ground and know how to say, "NO!" and assert your rights. Don't let them pick at you stuff before you are set up. They might get you flustered and have make a bad decision. Theft is also a concern.
You can benefit from the table, be prepared!
Call a coin shop and engage dealers to see what they thinks. Find a coin club and engage those people. Make it social without exposing your hand. Sell some, buy some, trade some. Don't ask me. I have no clue. LOL
``https://ebay.us/m/KxolR5
This has been an interesting thread with lots of good info.
One other suggestion that I don't think has been mentioned is listing some of them in a BST thread. Probably wouldn't work for every coin, but there have been members that have sold a pretty significant quantity of coins there. It would involve some work and has some risk, but also has lots of advantages (no fees, no tax docs, etc.).