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Author Topic: Significant differences between estimates and actual selling prices  (Read 531 times)

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Offline Montmercure

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Hello everyone,

Frenchy recently versed in antique numismatics, I consult a lot internet sales sites - particularly foreign ones [REMOVED BY MODERATOR].

What hurts me are the large differences between the estimates of the auction houses and the prices actually realized.

Frequently the observed deviations vary from 1 to 10 !! :

Latest examples to date:
[REMOVED BY MODERATOR] (August 2021 ANA Auction)

lot 46448
EUBOIA. Chalkis. AR Drachm (3.78 gms), ca. 290-273 / 1 B.C. NGC Ch EF, Strike: 5/5 Area: 4/5.
estimated: $ 100/200
completed: $ 1020

or
lot 46549
ROMAN REPUBLIC. C. Mamilius Limetanus. AR Denarius Serratus (4.00 gms), Rome Mint, 82 B.C. CHOICE VERY FINE. Edge Mark.
estimated: $ 150/300
achieved: $ 1,500

In addition, the coins were not exceptional

These are just two examples, but there are plenty of them in sales

So, what's your opinion :

- Have the experts become incompetent?
- Is this money "laundering" aid?
- The Chinese / Emiratis are in line and buy everything going?
- It is common practice and I am ignorant? (coming from classical philately or rather the reverse movement)

Thank you for your thoughts on the subject
Francois

Offline Meepzorp

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Re: Significant differences between estimates and actual selling prices
« Reply #1 on: August 27, 2021, 12:58:15 pm »
Hello Mont,

I am a moderator of this section of Forum. Technically, you are not supposed to mention dealers by name, except when nominating them for then NFSL. You didn't mention them in a negative way, but one of owner Joe's rules is that you shouldn't mention other dealers here in Forum. It wasn't a big mistake, just a minor one, and nothing to worry about. I edited your post.

By the way, I regularly do business with a few of the European dealers that you mentioned. Yes, you are correct. They frequently severely under-estimate the value of a coin. And coins sometimes sell for 10-20 times the dealer estimate. This is particularly true in their internet-only auctions, and not so true in their major auctions, with printed auction catalogs. I assume they do that to encourage bidding and so that a lower value coin won't be sent back to the consignor. I don't think that there is any malicious intent on their part.

Meepzorp

Offline Montmercure

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Re: Significant differences between estimates and actual selling prices
« Reply #2 on: August 28, 2021, 02:58:40 am »
1000 excuses for having quoted (without denigrating it), an auction house, which only served to illustrate my point. I w'ont do it in the future

Underpricing may be a way to protect dealears against unreported defects of coins (quality, re-engravings and even worse)

Concerning this systematic under-evaluation of coins sold via the internet (method that in my opinion will take precedence over traditional sales - excluding prestige sales), it leads buyers to no longer have a precise idea of the price to be paid to acquire such and such coin ...

Do we not thus create a speculative bubble fueled by international investors, very few of whom are collectors?

best regards
Fran├žois


Offline Meepzorp

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Re: Significant differences between estimates and actual selling prices
« Reply #3 on: August 28, 2021, 06:19:51 am »
Underpricing may be a way to protect dealers against unreported defects of coins (quality, re-engravings and even worse)

Hi Mont,

I don't fully understand this statement. And it doesn't really make sense.

Dealers usually reserve their best quality coins for their major auctions, the auctions with associated printed auctions catalogs. They usually put their lower quality coins in their internet-only auctions. These are coins that are traditionally not classified as "auction quality". If a coin appears in an internet-only auction, it is understood that the quality may be questionable.

The quality of a coin or any defects should be obvious in a photo. The fact that it isn't always reported shouldn't be a factor. A potential bidder can clearly see the surfaces of the coin in the photo.

A few decades ago, when I began collecting ancient coins, it was before widespread internet use. I didn't have internet access. I dealt with a few dealers who sent out printed mail bid catalogs. There were no photos in these catalogs. There was only a text description. I had to rely on what the dealer printed in the catalog and/or told me on the phone when I called him. They were almost always honest with me, close to 100% of the time. I had absolutely no idea what the coin looked like until I received it in the mail.

Tooling on coins should be obvious in the photo.

Meepzorp

Offline Meepzorp

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Re: Significant differences between estimates and actual selling prices
« Reply #4 on: August 28, 2021, 06:27:29 am »
Concerning this systematic under-evaluation of coins sold via the internet (method that in my opinion will take precedence over traditional sales - excluding prestige sales), it leads buyers to no longer have a precise idea of the price to be paid to acquire such and such coin ...

Hi Mont,

This statement isn't entirely true either. Once you have been collecting ancient coins for a while, you develop a feeling for what it is approximately worth. A coin's true value is determined by its selling price, not the dealer's estimate. As I mentioned above, dealers typically severely under-estimate the value of lower quality coins to encourage bidding and to ensure that it won't be sent back to the consignor.

Meepzorp

Offline Meepzorp

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Re: Significant differences between estimates and actual selling prices
« Reply #5 on: August 28, 2021, 06:39:38 am »
Do we not thus create a speculative bubble fueled by international investors, very few of whom are collectors?

Hi Mont,

I don't know how true this statement is either. I haven't heard any rumors that this is happening in the ancient coin collecting community. How do you know which international buyers are investors/speculators, and which ones are true collectors? Technically, I am an international buyer. Many of the dealers I purchase coins from are located in Europe, and I live in the USA.

From time to time, speculators and investors (who aren't true collectors) often buy "collectibles" (coins, comic books, etc.). And yes, that does create a bubble. But that bubble always bursts at some point, and someone gets stuck "holding the baby". The market always self-corrects at some point.

Besides, speculators and investors don't typically buy lower quality coins anyway. They usually invest in the higher grade material.

Meepzorp

Offline Montmercure

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Re: Significant differences between estimates and actual selling prices
« Reply #6 on: August 28, 2021, 12:45:59 pm »
Thank you to take time to answer point by point, your answers cheer me up a bit :-)

The statement below sarcastically indicates what might be happening:
Imagine a seller responding to a buyer the following:
"You tell me that the coin you bought for $ 1,000 has unreported flaws, but I estimated this piece $ 100, you still do not believe that with this estimate you were going to buy great luxury !"

You write "Flaws on coins should be obvious in the photo"
 I just finished Wayne G. Sayles' book "Classical Deception", what he describes breaks my optimism

Finally, I take your advice to buy only in big sales, even if it will certainly be less often :-(

thanks again
Fran├žois



Offline Kevin D

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Re: Significant differences between estimates and actual selling prices
« Reply #7 on: August 28, 2021, 12:49:02 pm »
An interesting discussion on the CT website, with input from a major auction house owner, can be found via the link below.

https://www.cointalk.com/threads/estimates-for-ancient-coin-auctions.360318/

Offline Ron C2

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Re: Significant differences between estimates and actual selling prices
« Reply #8 on: August 28, 2021, 01:51:02 pm »
I view the auctioneer's estimate as just a "starting bid" figure, most of the time.

In many recent auctions I've participated in, including live ones, they will do something silly like estimating 35 Euro for all denarii of Septimius Severus, regardless of condition or rarity.  Usually they all have the same starting price too, except in rare cases where you are dealing with an FDC in a printed catalogue

This is really just time-saving on the part of the auctioneer, many times they have several hundred coins to photograph and post, and doing detailed estimates on every coin isn't worth their trouble.  As Joe (FORUM's Owner) likes to point out, know the coin or know the dealer.  In the case of what you should expect to spend on a coin at an auction, it's really all about knowing the coin. 

If I see a 35 Euro coin that I know should sell for 500 euro, I plan my maximum bid accordingly.  It's not like these auctions are obscure and other numismatists also know what the coins are worth.  There's no such thing as a free lunch.
My Severan Denarii Gallery: Click here

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Offline Montmercure

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Re: Significant differences between estimates and actual selling prices
« Reply #9 on: August 28, 2021, 03:50:24 pm »
An interesting discussion on the CT website, with input from a major auction house owner, can be found via the link below.

https://www.cointalk.com/threads/estimates-for-ancient-coin-auctions.360318/

thanks a lot
there are a lot of subjects to think about, and for me who am a defector of classical philately, a change of culture to make  :afro:

Offline Montmercure

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Re: Significant differences between estimates and actual selling prices
« Reply #10 on: August 28, 2021, 03:56:18 pm »
I view the auctioneer's estimate as just a "starting bid" figure, most of the time.

In many recent auctions I've participated in, including live ones, they will do something silly like estimating 35 Euro for all denarii of Septimius Severus, regardless of condition or rarity.  Usually they all have the same starting price too, except in rare cases where you are dealing with an FDC in a printed catalogue

This is really just time-saving on the part of the auctioneer, many times they have several hundred coins to photograph and post, and doing detailed estimates on every coin isn't worth their trouble.  As Joe (FORUM's Owner) likes to point out, know the coin or know the dealer.  In the case of what you should expect to spend on a coin at an auction, it's really all about knowing the coin. 

If I see a 35 Euro coin that I know should sell for 500 euro, I plan my maximum bid accordingly.  It's not like these auctions are obscure and other numismatists also know what the coins are worth.  There's no such thing as a free lunch.

I understand
being a novice in the field I will have to resume my studies :(

Offline Joe Sermarini

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Re: Significant differences between estimates and actual selling prices
« Reply #11 on: August 28, 2021, 07:11:55 pm »
Auction houses like to brag about getting sales above estimates. I think it is meaningless because they just set low estimates that are easy to beat.

Auction houses will sometimes give advances to consignors based on the estimates. They don't want to advance more than the sale price less fees.
Joseph Sermarini
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Offline Montmercure

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Re: Significant differences between estimates and actual selling prices
« Reply #12 on: August 29, 2021, 03:56:32 am »
Two new elements that can effectively contribute to the "estimate / real value" disconnection.

I did not know the practice of the cash advance before the sale, but it should be practiced only for high value coins

The best indicator for a auction house should be the unsold rate (as low as possible) and I am impressed by the rates posted by some sellers (90 to 100%) which are impressive compared to stamp collecting !!

Offline Meepzorp

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Re: Significant differences between estimates and actual selling prices
« Reply #13 on: August 29, 2021, 04:35:15 am »
Hi Mont,

To further demonstrate this phenomenon, this coin appeared in a European auction that closed today (about an hour ago). It is a Calabria, Taras AR drachm. It is a nice, pleasing aVF coin. It is certainly not a high grade coin.

The dealer estimate (starting price) was 40 euros. It received 26 bids. It sold for 425 euros, plus fees. That is more than 10 times the dealer estimate. In US dollars, including fees, that is about $650 to $700.

I was one of the under-bidders on this coin. Obviously, I was substantially over-bid.

Meepzorp

Offline Montmercure

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Re: Significant differences between estimates and actual selling prices
« Reply #14 on: August 29, 2021, 05:55:23 am »
And in your buying strategy were you far from the selling price ?

Offline Meepzorp

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Re: Significant differences between estimates and actual selling prices
« Reply #15 on: August 29, 2021, 04:46:27 pm »
Hi Mont,

Yes, I was very far from the selling price. My maximum bid was about 1/3 of the winning bid. It sold for 3 times what I was willing to pay for it.

Meepzorp

Offline Meepzorp

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Re: Significant differences between estimates and actual selling prices
« Reply #16 on: August 29, 2021, 04:56:06 pm »
Hi Mont,

I would like to explain another Forum rule to you. Owner Joe doesn't like it when Forum members over-use quotes. You should only quote posts that are not directly above your post. The only time you should quote a post directly above your post is when you are quoting only a portion of the above post.

It is not a big mistake. It is something minor.

I edited your posts here in this topic accordingly.

Meepzorp

Offline Enodia

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Re: Significant differences between estimates and actual selling prices
« Reply #17 on: August 29, 2021, 06:49:50 pm »
Quote from: Meepzorp on August 29, 2021, 04:35:15 am
Hi Mont,
The dealer estimate (starting price) was 40 euros. It received 26 bids. It sold for 425 euros, plus fees. That is more than 10 times the dealer estimate. In US dollars, including fees, that is about $650 to $700.
Meepzorp

A ridiculous price for such a coin. Obviously someone with more dollars than sense!

~ Peter

Offline Montmercure

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Re: Significant differences between estimates and actual selling prices
« Reply #18 on: August 30, 2021, 02:09:50 am »
................. and even more than twenty people with more dollars than common sense

Offline Ron C2

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Re: Significant differences between estimates and actual selling prices
« Reply #19 on: August 30, 2021, 08:34:53 am »
Or possibly some of you have an outdated perception of this type's value?  A coin is worth what someone wants to pay for it.  It's that simple.
My Severan Denarii Gallery: Click here

R. Cormier, Ottawa

Offline Meepzorp

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Re: Significant differences between estimates and actual selling prices
« Reply #20 on: August 30, 2021, 10:45:49 am »
................. and even more than twenty people with more dollars than common sense

Hi Mont,

That coin received 26 bids. The number of bidders is not provided. It could have been 2 or 3 bidders placing 8-13 bids each.

Sometimes, all it takes is 2 or 3 bidders who really want a coin badly to engage in a "bidding war". The next thing you know, the coin winds up selling for an astronomical amount of money.

Meepzorp

Offline Montmercure

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Re: Significant differences between estimates and actual selling prices
« Reply #21 on: August 30, 2021, 02:06:17 pm »
you are right, i answer "without turning my tongue 7 times in my mouth" as we say in France  :angel:

 

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