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What do you get for your 5% commission when using an agent?
roadrunner
Posts: 28,374 ✭✭✭✭✭
I was just reminded on this situation and thought it might be interesting to write about since I never have. It happened several years ago.
I hired a leading dealer to bid on some pretty seated toners coming up in a major long time collection. The coins were slabbed but a number of them were very conservatively graded. I focused on 6 of those lots. Imagine my surprise when the dealer and I hooked up on the phone to discuss the lots the day of the sale and the only input I received from them was that I had a "good eye." They offered no comments on the lots themselves, what they might bring, what chances I had, and zero suggestions in strategy or anything else. I got the distinct impression that my brief 5-10 minutes on the phone was merely an annoyance. So no surprise that we ended up losing the 5 best lots (all the upgrade coins) and got the "turd" of the group that was at best graded correctly and priced at full market. Of course the other 5 coins upgraded and some by 2 pts. I recall that my focus coin, a PCGS MS66 half dime regraded at MS68. On that one I entered a bid of MS67++ and still lost it by a bid increment or two. It was clear it was not going to sell for 66+ money or 67 money but I was surprised that it sold for about 50% above solid 67 money. I knew I was in trouble when my dealer didn't understand my very high bid on this coin. This coin appeared a few weeks later in a major retailer's web site for about 2X what it fetched at the auction. Well, what can you expect for a 5% fee? They were probably just the wrong dealer for this specific job at the auction. But look what follows.......
The irony of the above situation came full circle when 2 of the seated coins of that group of 5 were purchased by this dealer following the auction after they both upgraded to PF66 (someone else upgraded them). The prices went up 30-40% or so and were now going to cost me an extra $3K or so each. One coin was really nice and I still would have loved to own it at the higher price as the orig grade of 65 was just too harsh. By the time I responded to that dealer after seeing it posted on line (within 24 hours) it was already out to someone else. Maybe it's just me but you would have thought that they might have at least offered me a shot at the coins before posting them for sale?
roadrunner
I hired a leading dealer to bid on some pretty seated toners coming up in a major long time collection. The coins were slabbed but a number of them were very conservatively graded. I focused on 6 of those lots. Imagine my surprise when the dealer and I hooked up on the phone to discuss the lots the day of the sale and the only input I received from them was that I had a "good eye." They offered no comments on the lots themselves, what they might bring, what chances I had, and zero suggestions in strategy or anything else. I got the distinct impression that my brief 5-10 minutes on the phone was merely an annoyance. So no surprise that we ended up losing the 5 best lots (all the upgrade coins) and got the "turd" of the group that was at best graded correctly and priced at full market. Of course the other 5 coins upgraded and some by 2 pts. I recall that my focus coin, a PCGS MS66 half dime regraded at MS68. On that one I entered a bid of MS67++ and still lost it by a bid increment or two. It was clear it was not going to sell for 66+ money or 67 money but I was surprised that it sold for about 50% above solid 67 money. I knew I was in trouble when my dealer didn't understand my very high bid on this coin. This coin appeared a few weeks later in a major retailer's web site for about 2X what it fetched at the auction. Well, what can you expect for a 5% fee? They were probably just the wrong dealer for this specific job at the auction. But look what follows.......
The irony of the above situation came full circle when 2 of the seated coins of that group of 5 were purchased by this dealer following the auction after they both upgraded to PF66 (someone else upgraded them). The prices went up 30-40% or so and were now going to cost me an extra $3K or so each. One coin was really nice and I still would have loved to own it at the higher price as the orig grade of 65 was just too harsh. By the time I responded to that dealer after seeing it posted on line (within 24 hours) it was already out to someone else. Maybe it's just me but you would have thought that they might have at least offered me a shot at the coins before posting them for sale?
roadrunner
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Ive thought about it, but then I then I realized I had about just as much chance winning without one. Everything Ive collected so far in coins I didnt need an agent or anything, I found and bought what I wanted.
I guess for some of the rarer stuff an agent might be of value.
For 5% though I expect some decent service, Im not paying them to be my friend.
roadrunner
<< <i>RYK, I already knew I had picked the wrong dealer for the auction gig. But how about for the retail gig that followed when they purchased some of those same coins? Did I pick the wrong dealer there too? One would have to say yes.
roadrunner >>
I think that this is an outfit that I would never bother contacting again, unless there was a substantial economic advantage to me for doing so.
Edit: In my own experience, auction representation has worked very well. Most of the time, the reps have described the putty, dipping, scratches, overgrades, etc. that are not apparent on the image and did not make the lot description. On the rare occasion that the coin passes muster, the agent has helped me calculate a bidding strategy that is likely to get me the lot but not likely to have me overpay for it.
The situation you described stinks and lesson learned on that dealer. Still I will not bid in an auction without an agent looking at the coins first if I can't attend. Auctions tend to be the dumping ground of dealers as well coins that were just made. In the OP's case it sounds like these coins were the exceptions to the rule....MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
assuming you could have made time.
Wondercoin
Is the dealer still in business and that's why you aren't mentioning who it was?
I know that, what you described, sucks at the best and may be unethical at the worst (depending if anything else was going on for the dealer.....)
I've been told I tolerate fools poorly...that may explain things if I have a problem with you. Current ebay items - Nothing at the moment
They have to provide some value somewhere - either knowledge about the coins or current market, friends who will "back off" for them, the ability to give the "evil eye" to other bidders in the room, or something. I'm not seeing it here. Avoid this person.
Chance favors the prepared mind.
NGC registry V-Nickel proof #6!!!!
working on proof shield nickels # 8 with a bullet!!!!
RIP "BEAR"
Wondercoin, the situation you mention occurs frequently in the coin market. It might actually be the normal course of affairs for all but the biggest retailers who just keep their hands raised on the lots they desire. But at what point do you call it collusion? When it's more than 2 bidders working together? 4? 5? 6? You did save your customer possibly $20K but it seems to me the loser here was the consignor who saw his "thin" market gem go for 30% of retail value. It's one thing when a pair of dealers consistently works together as a habit of business (double checking all their work and splitting all profits and losses)..... but maybe something entirely different when they only occasionaly or infrequently decide to work together. Is this any different than agreeing to lay off a particular lot for that dealer while he reciprocates on another? I don't see the difference. I've stayed off lots before for dealers or collectors I knew once I saw them bidding, but never told them I was going to do it. Was I tacitly colluding by not bidding to what I knew the true wholesale values of those coins were?
I recall watching a killer NGC MS67+ half dime sell for about 40% of value at auction. If fact I had a bid 60% higher than what it sold for but never executed it because no one made on the floor after it opened at $1500. I was scared off.....and astounded. Since this all occured within seconds I could only surmise that this was an AT coin to account for the lack of bids. Once the bidding was over I discussed the coin with a dealer sitting behind me who knows most of the "secrets" of the hobby. He casually mentioned that himself and a number of others were all splitting that coin since it was a great 68 shot coin. Doh!........ They didn't want to all run each other up so best just to split it and be guaranteed something. Did they do anything different than what Wondercoin suggests? Was it fair to the consignor and auction house? What if it was your coin or my coin does that change anything?
Sounds like at those price levels, you might have been able to use the 5% to fly out and attend the auction yourself, assuming you could have made time.
There's a lot of competition on coins like those. Each bidder wants to show that they can "pay more" for shot coins and be a genius. The down side of that is that most end up being losers, if not burials. And in this case I had previewed the lots a month before the show when they were at FUN. The only reason for me to personally fly out was to raise my hand in the auction room...not a good enough reason. Why not save the $600+ in expenses and hire a top gun presence that as someone already mentioned tends to stare down the competition (they are somewhat good at this). In the end I paid $250 in commissions on a coin that I actually overestimated a bit, and later lost another $250 when going to sell it (ie the original 5% commission that we overpaid at the start). RYK nailed it when he said I just had the wrong bidder with the wrong skill set. Had I attended the auction I'm not sure my results would have been much different as I usually won't stretch another 10% just because dealer X crack out artist has their hand raised.....but I can't say I've never done it.
roadrunner
Wondercoin
almost wouldn't be surprised if the agent you picked also noticed that there were some lock upgrades, bid more on them than you or had one of their "agents" do the bidding for them, cracked them out and got upgrades....then magically are offering the same coins to you a month later at true grades and full price plus some to make up for their trouble....but
It's possible considering that many crack out players work closely with a retailer or two to cash in their wins and lay off their losers. It's a symbiotic relationship. Crackers need retailers for best results. Sometimes it's just best for the retailers to let the Crackers go to town and take the risks, then come in later to buy the winners and losers yet still profit. As a retailer why get caught up in a bidding saga with a Cracker who already feels they have a winner, then you come along to juice them even more? I can't vouch as to the win/loss % of these guys but it's probably a lot less than 50%. The one big winner will more than make up for a few smaller losers. A big loser would be paying MS67++ money for the above half dime only to have it come back "altered surfaces" or "MS66" again. Remember that every single auction bidder is a winner.....until the grade comes back or you go to sell it. At that time winners and losers get separated.
roadrunner
I still just gamble on coins in auctions, but i generally do not spend more than 1200 to 1500 max on a coin. If i were to go over that point i would try to find another collector that knew the series to give me his input if he or she were attending the sale of the coin i was interested in. I would place more trust in collectors on this site over most dealers.
In the past i have shown a coin to a few different dealers at a show and not one of them came to the same conclusion on the coin being shown. I think that would be the case on auction reps too to some degree. You just got to find a good one and hope for the best if you go that route.
If i really needed help with a upcoming coin at action i would send wondercoin or 1 or 2 others on this forum a pm and go from there. I have read a lot of post on site site over the last few years and since i do not deal with the Legends and the like i would thrust wondercoin if he were willing to point me to the person i needed if he could not help me. There are a few others that have posted over the years that a outsider could tell from just reading post that they are upstanding peopl
It is hard to out smart anyone on a major auction now a days, to many people spends hours and days searching for that under rated bargain out there, others just have to much money and are willing to bid when it does not make sence to you.
NGC registry V-Nickel proof #6!!!!
working on proof shield nickels # 8 with a bullet!!!!
RIP "BEAR"
describe the coin in detail to you, recommend whether
you should buy or not and will discuss what they believe
you will have to bid to win the coin. Of course, nothing is
absolute, but I have found them to be,generally, spot on
for all points discussed.
Camelot
Roadrunner - No doubt you could have found a better agent, but I think you're asking too much to expect first shot at these coins. After all, the dealer knew that you had seen the coins already and what you were willing to pay. Now that the coins are priced perhaps 50% higher than your original bids, he can reasonably assume that you will not be interested. Even if you are.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
new higher price. Since such courtesy was not extended, my future
dealings with that dealer would be terminated permanently.
Camelot
Mr Eureka, with that logic, then the retailer should have never bought those coins in the first place for 30% more than they could have paid at auction.....when they were only PF65's. But you and I know both know the label in the holder makes a big difference esp. on liner coins where legitimate differences of opinion can exist. We both have purchased many coins where we would have been fine with a coin in a higher holder for more money and still bought it. The TPG's tend to have a more significant say as to what the value of a coin is vs. your typical collector/dealer.
Does a PF66 1857 dime ring a bell?
Would a previous owner have bought that back for 30% more money in a higher holder?
That was the first time I had used an agent since 1987. And no, I haven't found a new replacement as typically the best candidates tend to want the coins for themselves or their clients. They would rather not settle for 5% if they can make 10-20% or more. I had the right reps in the pre-slab era but the whole game sort of changed post 1986.
roadrunner
you are just a pitiful, puny, sardine.
Camelot
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)