Is it necessary to hire a dealer to broker the purchase of a great rarity?

Longacre · May 5, 2007 12:53PM

I was reading the new issue of CW, and it had a cover article on the recent sale of the 1913 nickel (for some reason, I have been getting my CW issues on a timely basis lately). The article indicated that the purchaser of the coin had the transaction brokered by Ron Gillio. This situation might be a little bit different from the question in my post, because it seems that the collector used Gillio in the past as his preferred/exclusive dealer. However, let's look at it a different way.

Everyone and their grandmother knew that the 1913 nickel was owned by Legend. If a prominent collector was interested in the coin (it was clearly for sale), why couldn't the collector just call Legend and open negotiations directly? What is the purpose of using a dealer as a broker? For a coin like the 1913 nickel, the grade is not an issue, so it's not like the dealer could give an opinion on whether the coin is accurately graded. The coin is obviously a very famous coin, so it's not like the dealer could give counsel about the marketability of the coin. The collector also disclosed himself to Legend, so it's not like he wanted to use an agent to protect his identity.

I guess what I am asking is what value does a broker/dealer add to a transaction of this magnitude for a coin that is world-famous? Couldn't the transaction have been handled with the collector and Legend, with an asset purchase contract drawn up by legal counsel, and forego the numismatic counsel?

Zoins · May 5, 2007 12:57PM

<< it seems that the collector used Gillio in the past as his preferred/exclusive dealer. However, let's look at it a different way. >>

If Grillio was his exclusive dealer, perhaps it was worth more to the collector to keep that relationship intact than whatever savings he would have achieved on this single purchase? Perhaps he didn't want to disturb what may be a very mutually-beneficial relationship overall?

fc · May 5, 2007 1:00PM

i think the rich and fabulously wealthly collector did this long time
?friend? a favor. free publicity. i would also agree this collector, if he
really is, would have known about the coin and who owned it.

Longacre · May 5, 2007 1:08PM

<< 

<< it seems that the collector used Gillio in the past as his preferred/exclusive dealer. However, let's look at it a different way. >>

If Grillio was his exclusive dealer, perhaps it was worth more to the collector to keep that relationship intact than whatever savings he would have achieved on this single purchase? Perhaps he didn't want to disturb what may be a very mutually-beneficial relationship overall? >>

That's what I was thinking, too. I assume that all big collectors have their preferred dealers, so maybe it is just not common for a collector to dealer directly with a selling dealer for a major coin.

TheCaveTroll · May 5, 2007 1:57PM

Don't underestimate the posibility that Gillio initiated the discourse with his long time customer. A good dealer know when the situation is right to discuss a new potential purchase with one of his best clients when a coin is available that he thinks fits into that client's collection.

IGWT · May 5, 2007 2:03PM

It's like Hollywood . . . Have your people call my people.

Longacre · May 5, 2007 2:04PM

<< It's like Hollywood . . . Have your people call my people. >>

Let's schedule a lunch, IGWT. I will have my secretary call your secretary.

IGWT · May 5, 2007 2:14PM

<< 

<< It's like Hollywood . . . Have your people call my people. >>

Let's schedule a lunch, IGWT. I will have my secretary call your secretary. >>

My scheduler does my scheduling; unless it's personal business, in which case my personal assistant does my scheduling. I don't know what my secretary does, but I'm sure that I'd be happy with her performance if I did.

Mercury · May 5, 2007 2:21PM

What about the idea that the collector used a dealer because he wanted to remain unkown. In this situation, the deal was bound to make the headlines. He used a dealer just to keep his name out out it.

Longacre · May 5, 2007 2:23PM

<< What about the idea that the collector used a dealer because he wanted to remain unkown. In this situation, the deal was bound to make the headlines. He used a dealer just to keep his name out out it. >>

A confidentiality agreement could have been signed if the collector dealt directly with the seller.

IGWT · May 5, 2007 2:26PM

<< What about the idea that the collector used a dealer because he wanted to remain unkown. In this situation, the deal was bound to make the headlines. He used a dealer just to keep his name out out it. >>

The folks at Legend know who purchased the coin, so I don't think that confidentiality was the purpose of Gillio's participation.

Unknown · May 5, 2007 3:12PM

This content has been removed.

Coxe · May 5, 2007 3:26PM

Gillio could facilitate the transaction pro bono and still be a reaffirmed superstar to get more high level business. You want to buy a major rarity at auction? Having one of the dealers involved here represent you would be a serious consideration after this publicity.

BigBubba · May 5, 2007 8:01PM

Never mind.

roadrunner · May 5, 2007 10:46PM

Hopefully, the 3rd party is able to negotiate a better deal for his client than he could do on his own. There are many facets of the
"deal."

Does a coin like this generate the usual 5-10% numismatic counseling fee?

roadrunner

BAJJERFAN · May 5, 2007 10:49PM

<< If Grillio was his exclusive dealer, perhaps it was worth more to the collector to keep that relationship intact than whatever savings he would have achieved on this single purchase? Perhaps he didn't want to disturb what may be a very mutually-beneficial relationship overall? >>

Just because you choose to have a dealer assist you in obtaining coins for your collection doesn't necessarily obligate you to run every single purchase through his hands. I'd guess the collector was probably thinking ahead about the possibilty of what to do in the event the coin would be sold even tho we are told he doesn't intend to flip it.

RYK · May 5, 2007 10:52PM

It makes total sense to me.

Let's say that the collector called Legend on the phone and asked to buy the nickel for $5M. Remember, this collector was not previously known to Legend. How would Legend know that they were not getting played in some fashion? I would imagine that over the last couple of years, more than a handful of crackpots have called to inquire on the nickel. By approaching Legend with a known peer, the collector has instant credibility.

When will thiese ridiculou questions stop?

Hopefully never

FatMan · May 5, 2007 10:54PM

<< When yo reach this calibre of collecting, you'll understand why the collector chose to do it this way. >>

200 easy!

FatMan · May 5, 2007 10:56PM

To answer the question at hand...Is it necessary? No. Prudent? Yes.

IGWT · May 5, 2007 11:04PM

-- "Questions like this only lead to more anti-dealer sentiments here." --

It's not the question, it's the tone and content of an answer that leads to anti-dealer sentiments.

RYK · May 5, 2007 11:16PM

<< -- "Questions like this only lead to more anti-dealer sentiments here." --

It's not the question, it's the tone and content of an answer that leads to anti-dealer sentiments. >>

Actually, compared to the average, I detect very little anti-dealer sentiment here (so far

).

Coxe · May 5, 2007 11:40PM

<< 

<< -- "Questions like this only lead to more anti-dealer sentiments here." --

It's not the question, it's the tone and content of an answer that leads to anti-dealer sentiments. >>

Actually, compared to the average, I detect very little anti-dealer sentiment here (so far

). >>

Me too. Not sure why it was taken that way.

As for the question itself, it is very legitimate. The Eliasberg 1913 Libery nickel absolutely did not require dealer representation. A good representative to handle the issues involving the transaction (contract and payment), reporting requirements, delivery, etc did not have to be a dealer. This is likely true for any extremely high profile and undisputed extreme rarties. I see dealer representation as important for lesser but still highly important numismatic treasures that perhaps are not as extensively documented. One of the pedigreed 1804 dollars comes up and does the buyer need to have a dealer in the middle? I don't see why. A good lawyer might be better.

Barry · May 5, 2007 11:50PM

Let's say that the collector called Legend on the phone and asked to buy the nickel for $5M. Remember, this collector was not previously known to Legend. How would Legend know that they were not getting played in some fashion?

Same way you get a dealer, with whom you've never done business, to accept a personal check at a show. Give him/her a few dealer references.

mozeppa · May 5, 2007 11:53PM

<< Questions like this only lead to more anti-dealer sentiments here. When will thiese ridiculou questions stop? >>

I believe the Original post was .."IS IT NECESSARY to enlist a dealer/broker...

<< Unlike most cheap skates, wealtheir people do have their dealers around for advice, service, and to work for them. >>

you are predjudiced and biased...to you the rich are "people"....

the rest of us are...well..."cheap skates".

....(bad form o queen)

ColonialCoinUnion · May 6, 2007 12:00AM

<< The Eliasberg 1913 Libery nickel absolutely did not require dealer representation. >>

How could anyone not directly involved in the transaction presume to know why the buyer chose involve Mr. Gillio, what he role he played or what benefit he provided?

Barry · May 6, 2007 12:05AM

Question for Laura:

How do you ship a coin like that?

BAJJERFAN · May 6, 2007 12:07AM

<< How do you ship a coin like that? >>

Brinks or a similar security service.

Coxe · May 6, 2007 12:09AM

<< 

<< The Eliasberg 1913 Libery nickel absolutely did not require dealer representation. >>

How could anyone not directly involved in the transaction presume to know why the buyer chose involve Mr. Gillio, what he role he played or what benefit he provided? >>

True in the particular case but not in general for the coin or that league of coin. The question was whether a dealer is required to broker such a deal. Sometimes perhaps but I see no reason to believe an extensively documented rarity like that needs a dealer specifically. It is a serious contract more than anything. Coin dealers cannot claim with complete authority that they alone can negotiate such a contract best. (Some are certainly within the subset of professionals who can though.)

BAJJERFAN · May 6, 2007 12:09AM

<< How could anyone not directly involved in the transaction presume to know why the buyer chose involve Mr. Gillio, what he role he played or what benefit he provided? >>

Maybe Mr. Gillio could find some way to enlighten the masses?

Barry · May 6, 2007 12:21AM

<< 

<< How do you ship a coin like that? >>

Brinks or a similar security sevice. >>

I knew it! Laura's alt!

foodude · May 6, 2007 12:31AM

How could anyone not directly involved in the transaction presume to know why the buyer chose involve Mr. Gillio, what he role he played or what benefit he provided?

Bingo; without the actual facts, one can only speculate/i]

Zoins · May 6, 2007 1:35AM

<< It would be the wrong coin for someone to steal anyway (too identiafiable). >>

Not to be a downer, but it would be worth stealing to sell to a black market collector, like certain paintings.

fc · May 6, 2007 1:42AM

Also, I believe it was Ron who may have brought the coin to the collectors attention.

i had a feeling this was the case. the dealer found a chump to make
some money on. buried the poor guy in the coin for years and years.

how is that for some anti-dealer comments? trying hard to please
here.

ColonialCoinUnion · May 6, 2007 1:48AM

<< Also, I believe it was Ron who may have brought the coin to the collectors attention.

i had a feeling this was the case. the dealer found a chump to make
some money on. buried the poor guy in the coin for years and years.

how is that for some anti-dealer comments? trying hard to please
here. >>

Brilliant.

fc · May 6, 2007 1:49AM

ccu, trying to tempt me to start a flame war?
not going to happen.

Russ · May 6, 2007 2:06AM

<< If you were ever in the collectors situation, you'd have done ot the same way. >>

Not me. I'd have just PMed TDN.

Russ, NCNE

Zoins · May 6, 2007 2:10AM

<< 

<< If you were ever in the collectors situation, you'd have done ot the same way. >>

Not me. I'd have just PMed TDN.

Russ, NCNE >>

What? You'd cut out Laura?

roadrunner · May 6, 2007 2:11AM

Careful, I think that CU gets a 3% fee of all 7 figure PM'd deals on the forum.

Even in auctions, EVERY major collector I know of works with a dealer.

Guess the definition of "major collector" just got revised.
Or is the new definition geared towards 6 figure coins and mid - 7 figure collections? Were Ford or Pittman collectors as well? Norwebs?

roadrunner

Coinosaurus · May 6, 2007 2:12AM

<< 

<< If you were ever in the collectors situation, you'd have done ot the same way. >>

Not me. I'd have just PMed TDN.

Russ, NCNE >>

You could do it that way, or just show up at the Legend office with $5M in pennies

Russ · May 6, 2007 2:14AM

<< << If you were ever in the collectors situation, you'd have done ot the same way. >>

Not me. I'd have just PMed TDN.

Russ, NCNE >>

What? You'd cut out Laura? >>

Nah, he would cut her in. I think.

Russ, NCNE

Zoins · May 6, 2007 2:14AM

<< 

<< 

<< If you were ever in the collectors situation, you'd have done ot the same way. >>

Not me. I'd have just PMed TDN.

Russ, NCNE >>

You could do it that way, or just show up at the Legend office with $5M in pennies

>>

That or ... JFK halves.

But Legend might be interested in a trade, $5 million for the unique moderncrap.com domain name? Of course, to get that kind of price, there might need a hit counter on that homepage

PerryHall · May 6, 2007 2:48AM

With Laura's reputation for honesty and fairness, I wouldn't hesitate to deal directly with Laura.

Longacre · May 6, 2007 5:59AM

For the record, there was no hidden dealer bashing agenda in my OP. I was simply asking whether it is necessary to hire a dealer to broker a great rarity. I am surprised by the turn of this thread and was just asking what I thought was a simple question.

Coxe · May 6, 2007 6:05AM

That's how I saw it. Seemed like a valid question and some gave valid responses. It wasn't specific to that deal. I think a 1913 Lib 5c or an 1804 S$1 is like a Picasso and doesn't need an expert dealer involved in the trasaction by its nature. If there are some conditions relevant to having a dealer (coin, art, ...), that is different. Great and extremely documented rarities don't need the discrimination that the few tiers below them do. Handling the contract, delivery, insurance, ... doesn't require a dealer unless that makes the buyer and seller more comfortable.

pbfloyd · May 6, 2007 6:14AM

You want a simple answer? Would you buy a $5000000 coin without someone guiding you? Of course not.... By the way, I don't have 1 /100 of the price to put in coins.

RYK · May 6, 2007 6:31AM

<< Also, I believe it was Ron who may have brought the coin to the collectors attention.

i had a feeling this was the case. the dealer found a chump to make
some money on. buried the poor guy in the coin for years and years.

how is that for some anti-dealer comments? trying hard to please
here. >>

As previously noted, we do not not even know if Gillio made a penny on the transaction.

As for burying the poor guy, poor guys don't buy $5M coins!

cladking · May 6, 2007 6:46AM

<< FC, Yeah, he's real buried-we had bascially a $5 million dollar offer a year ago-but it was too long and complicated to complete (but it was a s real as real could be). Then there was the LIVE all cash offer for a slightly lesser amount (from a collector) right after the FUN auction. And all along we had two major dealers who left us w/standing $4 million dollar offers (we never counted them, because we knew all along this coin was worth $5 million and had no reason to sell it for less).

Heres my comment to get you guys riled: the 1913 5C has more of a REAL market then any high grade finest known Pop 1 Modern! Obviously, this coin costs a fortune too! >>

Is there any thread in which a modern bash is OT?

tradedollarnut · May 6, 2007 7:34AM

<< Is there any thread in which a modern bash is OT? >>

No.

Zoins · May 6, 2007 7:39AM

<< 

<< Is there any thread in which a modern bash is OT? >>

No.

>>

TheCaveTroll · May 6, 2007 12:37PM

<< Also, I believe it was Ron who may have brought the coin to the collectors attention. it". >>

Isn't that what I speculated in my first post? lol

I reiterate, this is what good dealers do, they know their clientele, and they know when to approach them with the "right coin" for them.

Coxe · May 7, 2007 5:04AM

<< 

<< Also, I believe it was Ron who may have brought the coin to the collectors attention. it". >>

Isn't that what I speculated in my first post? lol

I reiterate, this is what good dealers do, they know their clientele, and they know when to approach them with the "right coin" for them. >>

Very true, but that wasn't the general question. I maintain that there not an absolute necessity for dealer involvement in transactions of the top major rarities (in coins, art, ...). Situations may warrant it though.

Is it necessary to hire a dealer to broker the purchase of a great rarity?

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