What’s It Worth? How dealers determine the value of a Rare Coin.
By Vic Bozarth – Bozarth Rare Coin Market Report
How are rare coin prices determined? Often the question dealers will ask is: “I know what Greysheet (Coin Dealer Newsletter bid) is, but what can I ‘really’ get for it?”
In this month’s Rare Coin Market Report, I will explain how I determine the value of an individual coin. Most often I will use a variety of different pricing sources to determine the value of a coin.
The most utilized source of rare coin pricing information among dealers are the variety of Coin Dealer Newsletter publications including Greysheet, Bluesheet, Monthly Summary, and the Quarterly Supplements. Dealers also use CCE, which is the Certified Coin Exchange. Coin World Trends, Collectors Universe prices, Redbook, and Coin Prices are also utilized.
In the last several years auction prices realized have become one of the most useful and often misunderstood sources of pricing information. Let me explain a little bit about all of these different sources before I explain how I use them.
CDN’s multiple publications include the Greysheet, Bluesheet, Monthly Summary, and Quarterly price sheets.
The Greysheet and Bluesheet are weekly publications and list many of the most frequently traded U.S. rare coins, BUT the values they list vary significantly.
Basically Greysheet lists sight seen bids for attractive coins. Bluesheet lists sight unseen bids for coins that might not be that attractive although they are graded correctly. Because I am looking for attractive coins, I often have to pay Greysheet bid or more for an attractive coin. If someone offers me a coin I don’t particularly like I am going to check the ‘bid’ on Bluesheet to see what the ‘basal’ value really is.
Depending on the particular coin the difference between the Greysheet and Bluesheet can vary as much as 70%. Yes, 70%!
CDN Monthly Summary is published each month and includes more of the frequently traded U.S. rare coins by date and grade including the early twentieth century gold series and most of the classic twentieth century collector series.
One of the three different CDN Quarterly issues come out every month and the three include all the other U.S. rare coin series by date. The Quarterly One issue contains half cents through quarters. The Quarterly Two contains halves through $3 gold coins. The Quarterly Three contains prices for $5 Liberty through $20 Liberty Gold Coins.
All prices for the Monthly Summary and Quarterly price sheets are for sight seen coins. There is also a supplement included with each month’s Quarterly Supplement that has prices for Proof coins not listed in the Quarterly Supplements.
Certified Coin Exchange is a dealer to dealer network owned by Collectors Universe/PCGS. Dealers pay a monthly service charge to actively bid or access the bidding information on this system. The bids are ‘live’ during the main business hours, roughly 11 to 4, Monday through Friday depending on what time zone you are in. These live bids are either S, sight seen or U, sight unseen. CCE also includes a couple of other marketing areas as well as the newer variation of the old dealer ‘teletype’ network.
Much of the information for CDN/Coin Dealer Newsletter bids comes directly from CCE. S-Sight seen bids are for coins that can be returned if the buying dealer feels they aren’t nice for the grade. U-Sight-unseen bids are for anything in the proper grade in the designated holders with no return privilege. Bids for PCGS and NGC coins are predominate although there are bids for ICG and ANACS coins.
Coin World Trends, Coin Universe prices, and Coin Values are all ‘retail’ pricing guides. Although the prices listed are GENERALLY what one would expect to pay for a NICE collector coin, I as a dealer often pay more than these supposed ‘retail’ prices for especially scarce or elusive coins.
Many of the more modern items are listed, but the values are quite subjective. Information updates are often neglected in these price sources. Many times, especially in rising or falling markets, the prices are just wrong. The Redbook or Guide to United States Coins is a fantastic source of information, BUT it is published ONCE a year and the values are geared towards the casual collector.
The last and most misunderstood source of pricing information are the ‘Auction Prices Realized’. The biggest U.S. rare coin auction houses sell thousands of coins each year at public auction. These prices most often include a 15% buyer’s fee. The information is incredibly valuable, but misinterpretation is really a problem. For a fee, you can access APR information on the PCGS website. PCGS compiles and lists coins by date and grade and has APR numbers for coins going back roughly fifteen years. Heritage Auctions have sold the most certified coins at auction and therefore their database is the largest individual auction company source. I use both the PCGS APR listings and the Heritage APR listings especially when determining an infrequently traded coin’s value.
Are you confused yet? You should be-HA! Many full time dealers don’t really understand the nuances that come with determining a coin value. If they can buy it at Bluesheet-sight unseen bid-they feel ‘safe’ because they haven’t paid any premium over the basal value. If they are only willing to pay Bluesheet numbers they are invariably going to get a high percentage of ‘ugly’ sight unseen coins. The problem with buying bargain basement material always comes down to this: YOU GET WHAT YOU PAY FOR!
To illustrate how I determine the value of a coin I am going to give you two examples. The first is for a frequently traded coin that exists in relatively large quantities, but has a huge demand. The second coin I am going to use as an example is a rare coin that might only come on the market once or twice every couple of years. Determining the value of the first coin is easy. On the second coin I will utilize virtually all the pricing sources I have mentioned previously. From that data, I will then determine both a price that I am willing to pay for that coin as well as a price I feel is fair to my customer.
Coin Number One: 1885CC Morgan Dollar MS65 PCGS. Although the 1885CC Morgan Dollar in MS65 is roughly a $1000 coin in MS65, it isn’t particularly rare but it is scarce and it has a huge demand. Not only do people love Morgans, but Carson City Morgans sell like ‘hotcakes’. Nice CC Morgans are out there, but the difference between an average coin and sight unseen coin is easily 20%. Let’s look at the bids and then I will make some observations.
1885CC Morgan Dollar MS65 PCGS. Mintage: 228,000. PCGS/NGC total population MS65: 5366
- G/S $900
- B/S $830
- CCE Sight $890
- CCE Sight-unseen $830
- C/W Trends $1250
- Coin Universe $1200
The prices vary as much as 33%. A pretty sight seen coin will cost me between $875 and a $950 to purchase in the wholesale market. To make a profit, I will charge between $1025 and $1100 for a NICE coin. If you want a sight unseen coin, I can probably sell you one for about $925 or less.
Don’t make the bargain hunter mistake. Yes, you can save $100 to $175 buying a sight unseen coin, but someday you are going to want to SELL that sight unseen coin. Sight unseen coins don’t magically become nicer sight seen coins. Both dealers and collectors are looking for NICE coins with eye appeal. Don’t settle for average. You will PAY for it in the long run.
1866 $3 Gold AU58 PCGS. Mintage: 4000. PCGS/NGC total population for AU58: 77.
- Greysheet Bid (for a common $3 Gold type coin): $1475
- Greysheet Quarterly Bid (for the date): $2575
- Bluesheet Bid: N/A
- Coin World Trends: AU55: $2500 MS60: 4000
- Coin Universe price: $3700
- Auction Prices Realized (last two years): $2875, 3450, 3450-N, 3910-N, 3565, 3450.
The prices listed vary significantly especially between the Greysheet ‘date’ bid and the Greysheet ‘type’ bid. The ‘type’ or common bid price is for the most common date in the series while the ‘dated’ CDN Quarterly bid reflects the price for a coin with a tiny original mintage with true scarcity. The ‘type’ bid does provide a basal value, but for this illustration is not pertinent.
Both Coin World Trends and Coin Universe prices are supposed ‘retail’ prices for the date, but for a low population coin with a mintage of only 4000 they are actually a little low. The Auction Prices Realized are all over the place. How do I determine the value?
After looking at the ‘bids’ for the date I refer to the APR-Auction Prices Realized. First I see how many have sold at auction in the last several years. If the prices realized fall into a tight range, my job is easier. If several have sold for roughly the same price and this price range fall between the ‘dated CDN Quarterly bid and the Coin World Trends or Coin Universe prices, then there is a good chance that the coin is worth roughly what they have sold for at auction. Basically an ugly coin will be worth less and a pretty coin will be worth more.
If the prices realized have both a wide range and don’t fall between the CDN Quarterly bid price and Trends Coin Universe prices, then the price determination becomes more difficult. Several questions should be asked that may or may not be answerable.
First, did one or two examples fall significantly out of the price range?
Second, did several sell during the same time period or in the same auction? Lots of factors drive the bids in an auction, but the biggest factor is whether the buyer paid a premium because they thought the coin would grade higher.
Third, if several coins are sold in the same auction that possibly came out of a little hoard or collection, an ugly coin could bring significantly less. In addition, several examples of the same scarce coin coming on the market at the same time can depress the price realized.
Here is what I see when I examine the Auction Prices Realized. The $3910 was an exceptionally nice coin or a potential breakout. The $2875 coin was an ‘ugly’ example. The other four prices all fall within a tight range. CDN Quarterly bid is $2575. Collectors Universe price is $3700. Coin World Trends is somewhere between $2500 and $4000. The four coins in the mid price range are probably attractive coins for the grade. An attractive example is worth somewhere between $2700 and $3100 wholesale and, if priced fairly should bring $3400 to $3800 for an attractive coin.
Remember ‘bids’ are just numbers on paper or a computer screen. This is a coin I just purchased recently. I paid $2800 and ‘flipped’ it to another dealer for $3000. Both myself and another dealer were willing to pay more than CDN Quarterly bid ($2575) for this coin.
For this example the 15% buyer’s premium has to be taken into consideration also. Many folks don’t understand how this 15% or ‘juice’ affects the value of a coin. Often times this 15% is split between the auction house and the consignor. Often times a dealer consigning a coin to auction will actually get between 1.05 to 1.08 of the 1.15 that includes the hammer price and the 15% buyers fee. In other words, the consignor is actually getting a little more than the ‘hammer’ price. The auction house is willing to give up part of their 15% to secure nicer consignments.
Where does CAC fall into the mix? CAC was founded in 2007 to ‘sticker’ coins that met their requirements for both nice eye appeal and correct technical grade. Basically, they are grading the graders. CAC coins bring more money. Frankly, I feel they should. CAC has done an excellent job of ‘stickering’ coins that are not only nice for the grade, but totally original. CAC coins often bring between 5% and 50% more than current bid levels on a wholesale basis depending on the particular issue.
The information I have provided today is very subjective. A nice coin will generally bring more whereas an ugly or darkly toned coin will bring less. There are dozens of additional considerations to determining the value of a coin. My goal with this article has been to provide you the consumer with an insider look at how a dealer values a coin.
Comments and questions are always appreciated. My methodology isn’t ‘rocket’ science, but these procedures have served me well over the last couple of decades. When pricing a coin, the quality of the coin itself should be paramount. I often pay ‘WAY OVER’ bid levels for an exceptional coin. Don’t be afraid to pay extra for an exceptional coin. Most often those are the coins I sell first!
Bozarth Numismatics offers hundreds of rare U.S. coins on their website bozarthcoins.com or via eBay each month. We attend over 40 shows a year and write another column each month called Rare Coin Road Warrior. You can view either our Rare Coin Market Report or Rare Coin Road Warrior articles each month on our website bozarthcoins.com or at coinlink.com.
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About the Author
Vic Bozarth is a Professional Numismatics Guild member (PNG number 661). Both Vic and Sherri Bozarth are members of the ANA, FUN, CSNS, and many other regional and state coin clubs and organizations. Vic has had extensive experience both buying and selling coins into the mid six figure range.Both Vic and Sherri attend all major U.S. coin shows as well as most of the larger regional shows.