For the new coin collector, the process of taking part in an auction often brings the risk of paying too much money, requiring careful planning and study before placing any bids.
A set of methods exists, helping you buy coins at the lowest possible price, determining the real value of coins and understanding how auction places work.
Study of the Market Price Before
The main thing for avoiding overpaying is finding the coin's real market price before the bidding starts, making this study the first and most important step. A novice collector must not use the price lists from coin sellers as the only guide, understanding that those prices are usually too high.
You must use records of the actual prices paid in past auctions looking at the prices from the last six to twelve months. The difference between the price the seller asks for and the price the coin was actually sold for can be large, sometimes up to 30% to 50%.
Study the history of sales for coins of the same kind, checking the year they were made and having the same quality grade.
Special care must be taken with coins put in plastic holders certified with a grade from companies like NGC or PCGS, knowing that the price difference between a coin graded MS-64 and a coin graded MS-63 can be very large.
If a coin is not in a holder, always give it a lower, safer grade in your mind, lowering your highest bid limit and paying for the extra risk the seller might have given it too high a grade.
Maximum Bid Limit
Letting your feelings take over during bidding is the main reason people pay too much, making a careful limit necessary. The technical way to stop this is to decide on your absolute highest money limit before you even make the first bid.
The highest limit must be worked out using these points:
The market price you decided on
Adding the auction house fee, which can be between 15% and 25% of the final bid price
The cost for sending the coin and insurance
The total amount found by adding all these costs is the coin’s true price, and this price must not be more than your maximum limit set before the start. Setting this limit in the auction system or writing it down on paper technically stops you from raising the bid quickly after seeing a competitor’s action.
Small Problems, Big Collectors
High demand always goes to coins that are in perfect condition or having the highest grades. You can lower the number of people you compete with by finding coins with small technical problems that do not change the coin’s history or look, but bring the market price down quickly.
You should look for coins graded as Cleaned — the price of such a coin can be 40% to 60% lower than a similar coin not having been cleaned.
Small dents or marks on the coin’s edge are technical problems that big collectors try to avoid, even though the picture on the coin’s center might be perfect.
Patina, is not formed as a result of exposure to strong chemicals, is of less interest to collectors who want to get a bright shine or a deep, uniform color change, these ones are often sold at a lower price, making them a good choice for new collectors.
Sniping Method
Sniping is the method of placing your bid in the very last moments of an online auction, stopping other people from making another bid in time.
This method works best for auctions not having the feature of automatically adding more time after a late bid.
Find the exact moment the bidding for the item will end
Get your highest bid ready, making sure it was calculated before
Place your bid in the final 5 to 10 seconds before the auction ends
This method works because most people watching the item do not have enough time to put in and confirm their own bid in the few seconds left, letting you win the item at a price that is the same as or just a bit higher than the last bid, not getting involved in high price fighting over a long time.
Unusual Bid Amounts
For example, most auction participants use round numbers when raising bids., $100, $105, $110, to make it easier to guess their next action.
Placing a bet with an odd number may surprise other people and prevent them from using standard betting actions.
If the current bid is $100 and the usual step is $5, then the next bids are usually $105, 110. Your bet should be 101.50 or 106.75 dollars — more than the minimum amount required to win.
If a competitor's automatic bet is set at $105, your bet of $106.75 will be a winning bet, with the price difference being as small as possible.
It also forces other people taking part in the bidding to enter an unusual number, which slows down their work and increases the likelihood of errors.
Less Popular Auction Places
Big auction houses bring in thousands of registered coin collectors from all over the world, making the fight for every item very strong.
To lower the price pressure, the new collector must look at smaller, less known, and local auction places.
Look for items on small local or national websites, and on special online forums. An item with the same coin, being sold on a less known website, will have much fewer people looking at it and fewer active bids, leading to a lower final price.
This needs more time for searching, but pays back with the lower final cost.
Buying Group Lots
Big collectors and sellers mostly avoid buying large groups of coins that contain a mix of different coins and qualities, requiring much time to sort and check the quality of each coin.
Even though most coins in such a lot might be common, the low competition for these lots because sellers do not want to spend time on low-profit sorting often lets you buy a few good coins for a price lower than the total cost of buying each coin by itself.
In this case, the total cost for the whole group is less than if you bought each coin one by one.
Avoiding Buying During Busy Auction Times
Coin collecting activity and competition become higher during big coin shows or on days known as the normal time for bids to end, for example, Saturday evening.
Focus your search on items that finish at strange times:
Very early morning hours
During the middle of a working day
During important holidays or large sports games
The smaller number of people taking part in the auction during these times, caused by the bad timing, leads to fewer bids and, because of this, a lower final price.
This method is a simple but good way to make the price better.
Coins Over Budget
After you try and fail to buy a coin, because its price went over your limit, you must immediately check the sale.
Look at the list of people who were actively bidding for the item.
Find out if the win was from a "snipe" bid or from a slow, planned rise in the price
If the auction place allows it, look at other items that this person won. This helps you find out what coins they are interested in and gives you information about their future bidding actions.
The constant checking of sales information and studying what other people do, based on real numbers, lets you make your highest bid plan better and helps you buy coins at a lower price in the future.