Need your opinions, RE: Coin Deal

I recently purchased a good bit of older coins from an older Lady. This is my first non-dealer purchase.
I met the lady at an antique show. I overheard her mention that she wanted to sell her coins.
I gave her my phone number and asked her to call me if she was indeed interested in selling them.

I met up with her and looked at her coins. I offered her a little more than twice the face value of all the coins. No big Key dates stuck out. Most dates were 30-40's few older. She took very good care of the coins! No cleaning, just sealed up nicely in an old jar.

She was very happy because a local dealer told her they were worth little and he barely offered her twice the face value.



In total the face value was approx. 200.00 - 250.00

$30-50.00 In mercury dimes, Fine to VF a couple AU.

$20.00 In Morgan dollars, Fine to Au(2-1921) (1 - MS60 or better 1881CC- Which I purchased already for $150.00)

$20.00 In Peace Dollars Fine to Au

$30-50.00 In Kennedy Halves 64 and older, Most @AU or just under AU

$40.00 In Roosevelt's, Most @AU or just under AU

$20-40 In walking Liberty's, Fine to XF

$10-20 In Franklins fine to Au

My question is do you think that this was a fair deal for both parties? I felt pretty good about it. I offered her about $50-75, if not $100.00 more than the dealer.
She was very happy with that.

I know it's hard to tell without pics, I will definitely post pics when I get a camera.

 

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Hmm... double face seems a bit low given the price of silver, and from your description, many of the coins might have numismatic value well above melt. I'm surprised the dealer offered such as low value. I would think most reputable dealers would have offered more. You may want to approximate the total value based on "greysheet" and if it is signficantly more, you might want to give the lady more cash to be fair. Our expert dealers in the forum will likely have some more suggestions as well.

 

First, a "fair" price is one that leaves both parties with the feeling that they both got a good deal. If that was the case, then at least by that definition, it was fair.

That being said, double face value sounds like a VERY low offer based on the fact that the coins all (based on your description) were silver. A more appropriate offer would have been 3.5 - 4.5 times the face value for all the silver coins with the exception of the Morgan and Peace dollars.

Although it is hard to say without seeing the coins, normally you might offer more like $5 - $20 based on the condition of the coins with $6 - $8 per coin being a common range.

 

Well that is one possible interpretation of "fair". However, a typical definition of "fair market value" is "The amount at which property would change hands between a willing seller and a willing buyer where neither is acting under compulsion and when both have reasonable knowledge of the relevant facts." Now, in this case, it appears that one or both parties did know know the relevant facts.

You hear stories all the time of unscrupulous coin dealers who take advantage of uninformed sellers by offering a small fraction of the fair market value for coins. The uninformed buyer may feel good about the deal, but it does not necessarly make if fair.

 

I agree, but it would appear that in the case of the original poster, neither seller nor buyer had the prerequisite knowledge necessary to ensure that a "fair" deal (as per your definition above) would occur. Without the "reasonable knowledge" and absent any compulsion, a fair deal between these two parties is one that both parties are comfortable with and happy about.

Now that the purchaser has the knowledge to know that the offer and deal were not appropriate, he/she needs to decide how to handle it. I know how I would! At the end of the day, those who do right will sleep well.

 

Those Walking Liberties are another potential under-payment. I'm down to four key dates needed to complete a date/mint mark set, and I expect to pay as much or more for each of them in EF as I paid for almost all the rest. The 30s-40s are nothing special, but if a few of the "some older" are Walkers . . .

 

Well, another way to look at it is...

She received double the face value of the coins, therefore, she doubled her money. What is the return on her investment percentage? 100%? Not too bad.

Seriously though, I agree with rbm86 about fairness. If she let her coins go without knowing how much they were really worth...well, I would want to know that I got them fair and square...at a fair price...and if not, after re-calculating the amounts and the fair market values, if I determined she got hosed...

...I would call her back and offer her a little more for the coins.

 

Well if both parties are happy, that is one way to look at a fair deal. Many times we are offered coins at near face value because the owner has no idea of the value. An example is the seated half we found in a roll recently. The staff and I never fall below current values. If buying in bulk or junk silver, the market dictates the price. A person who comes away with more than they ever imagined, they will remember you when they have more coins or a friend who has them.

Of course, this is just one dealers opinion

 

Another way to look at it...

A fair deal occurs when a purchaser makes an appropriate offer, to a seller under no pressure, based on his or her knowledge of the items being purchased.

An unfair deal occurs when a purchaser makes an inappropriate offer based on his or her knowledge of the items being purchased or based on his or her evaluation of the seller's knowledge of the items.

In my personal opinion, it would be inappropriate and unfair for a dealer to offer a seller 2X face value on silver given the current spot prices. On the other hand, it is totally reasonable for someone who lacks any knowledge of the value of silver or coins, to offer 2x or 2.5x face.

 

I agree with you. I just could not live with myself if I knowingly took advantage of someone.

It is one thing to get a higher grade, or finding a mintmark that was overlooked. It is a whole different story to offer a buy offer to those that are uninformed.

Now I do not believe that this person who started the thread did this. Sounds as if both were just trying to make the best possible deal. No harm - no foul.

 

But the dealer who supposedly offered even less was unethical. Most coin literature I have read suggests that such activity is not necessarily illegal, but unethical.

 

I would go through the coins with a blue book and give the old lady the difference, but that is just me. It sounds like you got quite a bit of stuff though, so you might want to just give a cursory glance at each coin and put aside anything in au and better for a more through look at the prices. I know that there are a couple of peace and morgans that can still be expensive even in xf.

 

Absolutely.
While it is still happening, I hope that with today's access to information it is a dying trend.
TV, Sunday Mailers, large mailorder companies make this a habit in both buying and selling.
It makes all of us dealers look bad.
Competing with QVC in Delaware, we are often accused of trying to basically steal the merchadise offered. When these people pay 400% above retail and then hear on TV how the prices are going up and up, they try to sell. When we offer greysheet prices, they are shocked. When we show them the price guide, they often believe that we print them ourselves to rip people off.
As long as people are buying and selling, there will be unethical sales.

Sometimes it is just a matter of making a choice and living with it. To me, there are more important things than money.

 

I find it hard to believe that an actual dealer offered prices BELOW 2x face value on silver dollars. Such a person would hardly be able to stay in business very long. I think either the lady was confused about how much had been offered, or the dealer hadn't seen everything in the collection. I guess he/she could have been just "taking a shot", thinking the lady would sell regardless...but it would be a real shame to know that a full time dealer tried that. Maybe he was a vest pocket/flea market dealer? We'll never know for sure, of course. But 2x face value is a very low price. Personally I'd be inclined to give her some more money. Generic 90% silver is a no brainer at 3 x face and with the current silver levels even 4 x face is not paying too much. Peace dollars are $6 or more...even for ugly ones.

 

Every so often these motel buyers will come into various cities and run major ads in the newspapers offering to buy coins and collectibles. They run ads stating that they buy all old coins at 3 times face or better. Many sell their coins at such events because they have no idea of where else to sell. The woman that rolled up her seated half, just did not have any idea of how much they were worth or that people actually bought such things.
Too often, these are older people that get taken advantage of in every aspect.
Tradernick could be right. A few vest pocket dealers/flea marketers will make these low offers hoping that they can make their profit margins grow.
One of my hopes is that one day I will be able to tell someone that they own a very valuable coin. Mr. Montgomery formally of Bowers and Merena had that opportunity at the ANA show in Baltimore. He was the one that got to inform the family of the 1913 Nickel that "yes, they own a million dollar coin". I think that it would bring me as much joy as it would the owner of the coin to do just that.
Now there aren't any missing million dollar coins any longer, but rare and valuable pieces are just waiting to be discovered.

 

MAN I wish I could have been the one to give them that great news!
Once a fellow showed up at the shop with a 1950 proof set...he had no idea of the value. You should have seen him when I told him...it was like he had a religious experience, right then and there.

 

It appears to me the "dealer" in question saw an easy mark and tried to take advantage of the old lady. She would have probably, eventually, sold out to the "dealer" if Da Vinchi had not entered into the equation.

As long as Da Vinchi purchased the coins at around the price a dealer would have to pay in order to buy them, it was a fair transaction and he did the right thing.

There is certainly nothing wrong with getting a good deal though.

 

In NY we call what ND refers to as "pickers." They travel with a cell phone and in advance of arriving in an area, take out an advertisement in the local penny saver. Most of them buy silver at 2 or 2.5x face currently and immediately "turn" it to dealers for a handsome profit - especially when the silver is a horde of unsearched Morgans, Walkers, etc.

The process is unethical at best and, given the laws in some areas, it could even be illegal.

 

Oh yeah I wanted to touch on hotel buying, too. I used to do that years ago and it was fun. I'd love to try it again but it's so hard just to get away from the day to day grind.
And it takes a LOT of resources to do it right. You need several people who have knowledge of jewelry, coins, bullion, flatware, diamonds, watches, antiques, etc. Safes and coin counters are a must, and I always liked having a couple of uniformed guards in the room just for "prescence".
But the overhead is so high that it's hard to do it profitably these days. HUGE advertisements are needed for the weeks before and during the visit there. And there's the not so small matter of hotel rooms, food for everyone, etc.
If done properly, hotel buying can be a lot of fun and provide a service for the locals who may not have a place to dispose of coins and other estate items.
But the biggest problem with doing this is that every state county and town has different and sometimes unique laws/rules regarding buying items like these. Getting all the fees and documentation can be a real pain and there's always some last minute details that someone forgot about.
Still, don't be surprised if one day you hear tradernick is coming to a Ramada near you! haha.

Nick

 

Well we have a special law in Delaware. The old law requires that purchases of precious metals made by out of state companies visiting remain in the state for 30 days. Since there are so few of us regular dealers in the state, we can use the state troopers to inforce this old law. We keep the motel buyers out for the most part.