Auction estimate prices

Discussion in 'Ancient Coins' started by Basileus Antialcidas, Sep 25, 2021.

  1. Basileus Antialcidas

    Basileus Antialcidas Active Member

    So I am wondering as I participated on my first real auction, why do the estimate prices are so low on coins that I my self knew that were too low and also in the end the prices that the coins were realized were three and four or even ten times the price that the auction house estimated.
     
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  3. ambr0zie

    ambr0zie Dacian Taraboste

    Do not rely too much on estimates. I have no idea how do some houses estimate a price - probably they study the last times similar coins where auctioned and calculate an average.

    Auctions are often unpredictable. It is irrelevant if a similar coin to the one you're looking at was sold 1 year ago with 100 EUR, similar condition. You might win it with 100 or with 60 if there are not many bidders wanting it. OR if you have a serious competitor who really wants that coin you might see the price rising to 200.

    I had situations where I was very confident a coin I was after should NOT have the final price over 60-70 EUR and reached almost 200.
    Or coins where my bid just a shot in the dark, something like "nah, no chance, but why not" and I won coins with 30-40 EUR, my personal estimate being 80-100.

    My personal strategy is studying previous prices for similar condition coins and estimating what would be a correct price for me, depending on how much I want the coin.
     
  4. tibor

    tibor Supporter! Supporter

    Many large auction houses give loans against the final out come
    to their preferred consignors. To protect themselves, the auction
    houses assign low starting estimates. So if you consign a group
    of coins, they let you borrow against the final out come before the
    auction starts. Second, the auction house looks like a miracle worker
    to future consignors. A previous collection was estimated at 500
    Euros but brings 1000 Euros.
     
  5. Ocatarinetabellatchitchix

    Ocatarinetabellatchitchix Well-Known Member

    An example: CNG auction 118 (13th-14th September) sold for over 4.2 million, more than double the pre-sale estimate...
     
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  6. Heliodromus

    Heliodromus Well-Known Member

    All of the above, plus low starting prices and "estimates" helps lure in more bidders who will help drive prices up. I completely ignore estimates, and use historical sales prices instead as a guide.
     
  7. ancient coin hunter

    ancient coin hunter 3rd Century Usurper

    The estimates are often comically low and encourage bidding activity. Like most auctions, bids tend to come in fast and furious in the final seconds. I've been blown out of the water on coins where I had bid, say 3x the starting price but the coin hammers for 10-12x. However, I did have some success in the Leu auction nabbing some nice and very rare roman provincials for 2x the asking price. Not too many bids for those apparently.
     
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  8. physics-fan3.14

    physics-fan3.14 You got any more of them.... prooflikes?

    It depends on the auction house, of course, but sometimes the estimate comes from a price catalogue. Printed catalogues are often woefully inadequate, not keeping up with market trends, not being updated often enough, or sometimes even having wrong data.

    I recently ran into this problem trying to consign coins to a well-known auction house. I estimated the coins (based on recent trends and prices paid) to be about $3000.... the staff member I was talking to estimated them at $800. He told me his estimate was based on the catalogue value.
     
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  9. John Skelton

    John Skelton Morgan man!

    I recently attended two auctions, one st my coin club and the other less than 20 miles away. The club auction has a reserve for every coin, and if it doesn't sell, it's returned to the owner. The other auction sells every coin for whatever they can get, but has the largest amount of coins.

    I keep track of what the coins sell for at both auctions. What's the best use for this information?
     
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  10. Heliodromus

    Heliodromus Well-Known Member

    I keep photos of sales of all coin types I'm interested in, together with all relevant information: size, weight, price, date sold. I have a pretty narrow interest, basically Constantine, and co-emperors, but at this point have collected a database of over 18,000 coins! It's invaluable both for pricing as well as things such as style comparisons, checking issue weights, assessing marketplace rarity, etc.

    I say "database", but really these are just files on my computer, organized into a hierarchy of directories to be manageable and so I can easily locate types I am looking for. I use long file names including emperor, mint, date, attribution, dimensions, price, etc, which allows me to use file search to locate coins based on any of these criteria.

    Of course you could use available online auction records for price research too, but that isn't going to include things such as eBay, your coin club sales, or coins from other sources. It's also way more convenient to have all records in one place with consistent naming, rather than having to search in 10 different places. I also resize all photos to a standard 800 pixel width, and rotate busts to upright position if needed, both of which help doing side-by-side comparisons of coins.
     
    Last edited: Sep 25, 2021
  11. robinjojo

    robinjojo Well-Known Member

    I think there is an element of psychology when it comes to auction estimates. Obviously an estimate that is too high will discourage bidding. I've noticed that, in some floor auctions, a lot that does not attract any bids will open at a percentage below the estimate in a effort to attract bids. Sometimes that works, other times it doesn't.

    Low estimates, compared to what a comparable coin would fetch in the retail market, are meant to attract bids and to create momentum with successive bids. Given the degree that a coin is deemed desirable among the active bidders, that can result in a hammer price significantly over the estimate. So many factors come into play, including the Ego (or lack thereof) of each bidder, and the amount of money a bidder is willing to commit to win a lot, that experienced bidders who have gone down this road many times before recognize the fact that low estimates are really just a portal for very higher hammer prices, in the end.
     
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  12. corvusconstantius

    corvusconstantius Active Member

    In my experience the estimates are usually undervalued. However, in some instances I've noticed that the auction house will be very reluctant to estimate below some arbitrarily defined baseline. For Roma Numismatics e-sales for example, I've noticed that a huge bulk of lower value coins (basic Decius and Philip antoniniani for example) are estimated at £50 and many of them go for 30/35. It takes a particularly poor condition for the estimate to be lowered.
     
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  13. panzerman

    panzerman Well-Known Member

    I never rely on estimates. With Heritage for example, you can check their auction trends/ archives for realistic market value.

    I find it takes a bit of good luck/ timing to score your prized coin. Ever since COVID appeared/ auction prices have gone thru the roof. very few deals. Sometimes, obscure auction houses will have a super rare coin, that you can win....this rarely happens with CNG/ Roma/ Kunker/ Heritage/ Stacks.
     
  14. tibor

    tibor Supporter! Supporter

    With the coins I collect, estimates and past history are not even close to
    reliable. Even before COVID I would have to bid many (5x-10x) times the
    estimate. Sometimes much more and even then I was not the winner.
    Sometimes losing by several bid increments. The past 15 years, I've been
    lucky to win half of what I bid on.
     
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  15. savitale

    savitale Well-Known Member

    1. The auction house never wants a sale to total up below estimate because that would be bad press.
    2. People are enticed by the low estimate and start bidding, participating on lots they otherwise would have skipped if the bidding opened at the market value.
    3. For higher priced items there is often some contractual obligation with the seller and/or a reserve. This obligation or reserve is usually very close to or equal to the estimate. If the estimate is near market value, some fraction of the coins will not sell and the auction house will make no money.

    The above makes sense for coins that sell for ~1.5x to 2.5x estimate, which is the vast majority. When a coin sells for 5x or 10x estimate, I think either the cataloguer just didn't quite understand the market for that coin or two people really wanted it.
     
  16. Cherd

    Cherd Junior Member Supporter

    Given the fact that auction houses make money by providing a public facing sale platform, and then skimming money off of the sale prices of other people's collectables, I see any influence on sale price to be nefarious on their part.

    This is all pure speculation, but I suspect that the strategy goes something like this:

    1. Auction houses provide estimates with the intention of driving up sale prices on the whole, this is most effective for items where value may be difficult to determine. This type of influence is most effective on people that are less knowledgeable.

    2. Items that are famous or well documented will carry a final sale price that is independent of their influence. They will tend to underestimate the these items in order to bolster a reputation of under-estimating value.

    3. A reputation for providing low estimates makes #1 work more effectively.

    People tend to trust public auctions because the value of items is determined by what people are willing to pay. This dynamic becomes corrupted when those that benefit from higher sale prices exert influence on our bids. That being the case, auction houses should keep their damn estimates to themselves. They are essentially saying, "I benefit if you bid more, now let me tell you what you should bid!".
     
  17. GregH

    GregH Well-Known Member

    Auction house estimates are meaningless. Research recent hammer prices for the coins you're interested in.

    The coin market is overinflated at the moment - due to cashed up COVID-era investors who don't know what they're buying, but who bid insane amounts of money anyway on common coins unnecessarily slabbed with high marks out of 70. I note that common coins of common emperors in EF+ condition are inflated more than rare coins of rare emperors in sub-EF condition.

    I wouldn't pay any more than what a coin sold for pre-COVID.
     
  18. Cherd

    Cherd Junior Member Supporter

    My thoughts exactly. Although, it has been really tough to repeatedly come away from auctions empty handed over the last year. I just keep saving up my hobby allotment and telling myself that my collection will be better off in the long run. Hopefully this turns out to be a true sentiment :oldman:
     
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  19. Cherd

    Cherd Junior Member Supporter

    Edit: Accidental post
     
  20. pprp

    pprp Well-Known Member

    If the consignment is lost in transport or stolen from the auctioneer before the auction takes place, guess what the consignor gets :bored:
     
  21. coolhandred24

    coolhandred24 Member

    My times the consignor wants to have a "reserve price," which is an amount usually set at 1/2 the low estimate. The bidding often starts at this price and if there is no bid at that price the lot is passed.

    This does not happen that often with coin auctions, but is very common for art auctions.
     
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