Learning how to accurately grade coins will take time, but is worth it when it comes to avoiding costly mistakes.
John Krupka, owner of Point Coin, Stevens Point, Wis., said overgrading is a common issue for both buyers and sellers.
“I think that, for a lot of people, it’s common to want to grade their coins better than what it would grade,” he said.
Dealers often get calls from people who say their coin is in great shape and they’re looking to sell it right away, he said.
“Anyone buying a coin needs to see it first though to determine the grade and the price they are willing to pay for it,” he said.
Certain requirements are necessary to meet certain grades, whether it’s Liberty’s headband and how many letters are visible or the wear on the eagle’s breast, he said.
“A buyer needs to see the coin to determine if the coin meets the criteria to make the grade. That goes hand in hand with any product like cars or houses,” Krupka said.
Mike Schiller, owner of Allouez Rare Coins, Allouez, Wis., said that overgrading then leads to unrealistic expectations about the value of the coin.
“When someone doesn’t know how to grade, they tend to look at a price guide and go all the way to the right to the MS-63 prices,” he said. “And this may be for a coin that’s been beat up and looks like it’s gone through three world wars.”
Expecting a high value for a coin that turns about to be much less expensive than anticipated occurs often, he said.
“Sometimes, sellers come in expecting Cadillac Escalade money and leave with enough to fill a Volkswagon Bug gas tank,” he said.
A man recently came into his store wanting to sell a key date Barber dime, Schiller said.
“He had heard about one selling for $40,000 recently and was looking to get the same for his coin. The one that sold for $40,000 looked like it came right out of the Mint and his could maybe grade very good.
“So, we made him an offer, he left to get other offers and then came back to accept our offer,” Schiller said.
Julian Leidman, owner of Bonanza Coins, Silver Springs, Md., said that it’s best to explain how condition and rarity affect the price of the coin.
“After hearing that, 98 of 100 people will accept that reasoning while two will think I’m a thief,” he said.
Sometimes the seller has looked up the price for the wrong mintmark, he said.
“They then look to the highest value possible,” he said.
It’s part of the hobby to make those mistakes and learn from them, he said.
“Patience is a critical quality in this hobby,” Leidman said.
Schiller said that buyers also need to practice their own grading skills to avoid buying overgraded coins.
“We had a gentleman come in looking to sell an 1886-O Morgan dollar that was graded MS-65,” he said. “He had paid some $15,000 for it from a telemarketing coin selling company who offered it as a great deal.”
But that grade came from what Schiller considered a low tier grading service. When it was regraded by a top grading company, the coin was graded MS-61.
Sometimes there’s even confusion when looking at two coins that grade the same but look different, he said.
“The main thing is where you have someone say, ‘I wonder who graded this ...,’” he said.
“They see two coins that are MS-62 and they look different.”
It’s possible to have two coins with the same grade and have deficiencies in different locations, he said.
“The grader looking at them can see the fingerprints, contact marks and general eye appeal that occur in different areas to give the coins the same grade,” he said.
It’s best to learn those grading techniques from practice and by talking with a dealer, Schiller said.
“That’s part of what we do is educating. If a customer doesn’t leave here knowing more than they knew before they came into store, we haven’t done our job,” Schiller said.
Krupka said that any customer that comes in to buy from a dealer has to have confidence in that dealer.
“A dealer’s reputation is very valuable, after all,” he said.
A dealer can help educate anyone about numismatics, but taking the initiative to learn is important too, he said.
“A person, whether an investor or collector, has, and I stress this, to look up and do their homework on their coin,” Krupka said.
“The more you know about the coin and this hobby in general will help you out. That’s the key to being successful in this hobby.”
This article was originally printed in Numismatic News Express.
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