Posts Tagged ‘sight-seen’
Sight-Seen vs. Sight-Unseen
When acquiring rare gold coins it is important to understand the difference between sight-seen and sight-unseen coins. If a dealer attends a coin auction and fifty 1903P $20 Liberties in MS63 are up for sale, a dealer may make a bid on those coins sight-unseen. This bid will typically be much lower per coin than if that same dealer were to be able to sit with each coin and examine them. This could be a difference of hundreds of dollars bid on each coin, even when the grade is the same on every coin.
Nicer coins fetch more of a premium. If a customer wants the cheapest coins available, he or she can expect the lowest quality coins. The better the quality the more money a coin will cost. In other words you get what you pay for.
For better dated rarer issues, these coins do not trade on a daily, weekly or even monthly basis. These types of coins trade when a buyer and seller get together. A dealer will pick up that particular coin sight-seen and turn around and retail it to a customer sight-seen. This coin will fetch a higher price than a sight-unseen coin. This coin would be something that a collector would be proud to own and that the dealer would want to buy back at a later date.
Sight-unseen prices do not represent value; they represent quick-sale wholesale prices. At an auction one might see sight-unseen bids at around $1,400 on a particular coin and yet the sight-seen bids may be in the area of $1,700-$2,000. Therefore sight-unseen bids would be taken when a dealer needs quick money. When a dealer sells nice coins they command sight-seen prices. These coins are of the highest quality and thus command the highest prices when being sold back to a dealer. When a dealer knows what he or she sold to a customer sight-seen, he or she should be willing to buy them back at the same level of quality.
What is important to understand is that some companies will sell coins at sight-seen prices but then buy them back at sight-unseen prices. This could mean hundreds or even thousands of dollars based on the coin that is being sold back. Therefore it is important to choose a dealer that will buy coins back at sight-seen prices.
Where Can You Buy Gold?
There are many places to buy gold, both brick and mortar and online. Most gold purchases are done via telephone from broker/dealers around the country. However you can also purchase from a local gold coin shop. You should be very careful when making a purchase in gold as the industry for physical gold is unregulated. Therefore choosing the right company to buy from is the most important decision you will make.
Searching for the right company can be easy if you are armed with the right questions.
How long have you been in business? There are a lot of gold companies popping up in order to take advantage of the growing demand. You want to deal with a company that has been in business for at least 10 years. You want the company you buy from to be around when you are ready to sell because they will most likely be the ones to buy your gold back from you at a good price (especially when dealing in numismatics/rare gold coins). 90% of companies will fail within the first 10 years of doing business.
What are your spreads (not commissions)? This is how you compare companies. The price of a coin is usually less important than how much they will buy it back from you. Spreads on numismatic coins can range greatly, the average spread being 28-35%. Spreads are based on a company’s retail price; if you buy a coin today for $1,000 at a spread of 35% and nothing changes in the market you will get back $650. If you buy a coin today for $1,000 at a spread of 28% and nothing changes in the market you will get back $720. This is why the price of the coin is less important than the spread at which they will buy it back.
Do you deal in sight-seen coins when you sell and when you buy them back? Some companies will sell you coins at what the industry call sight-seen prices but then buy them back at sight-unseen prices. This could mean hundreds to thousands of dollars based on the particular coin. You want to deal with companies that deal in sight-seen coins going in and out of the market.
What service do you provide after I receive my gold coins? Some companies, especially local shops offer nothing to the buyer after the sale is complete. Or they only call you to sell you more. You need to work with a company that is going to help you track values over time and that can give you input over the course of your coin ownership.
Here are my goals and objectives, what do you recommend and why? This is a very important question. Different types of gold do different things for your portfolio. Some companies only sell what they have on hand or what will make them the most money. It is more important for your consultant to get to know you and your goals in order to really help you meet your objectives.
Being armed with these questions should help you to narrow your search to a company that has integrity and that will help you meet your goals objectives.