Auctions are a glamorous way to sell your coin collection. Once again the amount of time, effort, and additional money you are willing to invest must be considered. Time is a particularly important factor with an auction. Things consigned to an auction sell when the next auction date is scheduled, in some situations many months later.

Auction houses do not hold auctions every day. They happen at intervals that allow time to accumulate and prepare consignments for sale. This may include advertising or other publicity. It may include illustrated auction catalogs if the auction house sells particularly important or valuable consignments.

An auction is the ideal economic climate in which to sell anything. The price realized is based on supply and demand. It is the job of the auctioneer to get as much interest drawn to the auction as possible to increase the demand for the fixed supply of whatever is to be sold.

Understand what you have and be willing to accept its true value to someone other than yourself. Do you believe you can get a better price for your collection at an auction than if you try to sell it yourself or sell it through a dealer? If so then this is the sales method for you.

Not all auctioneers are created equal. Some auctioneers sell household goods to a local audience, other auctioneers sell specialty items into local markets, and still other auctioneers sell specialty items to national or to international audiences. Each of these auctioneers has standards and values that merchandise they are willing to accept must meet. You can't expect a major coin auction house to take an interest in a minor value collection.

The Local Auctioneer

A local auctioneer may be willing to accept almost any coin collection. Low value coins often sell to unsophisticated bidders for more money than they may be worth at many of these sales, however rarer or more expensive coins or notes typically sell for too little. Be careful what you consign. Make certain the auctioneer has some experience selling numismatic objects. Local auctioneers sell virtually anything they perceive as having value, so the auctioneer may or may not have experience selling coins and notes. Ask the auctioneer how potential bidders get to preview coin consignments in a secure environment. Before handing over your objects for consignment, make sure to sign an agreement with the auctioneer that spells out whether the consignment is covered by your insurance or the auctioneer's. The agreement should also clearly state that the auctioneer takes full responsibility for theft or damage to the property while it is in his possession.

Small Market Specialized Auctioneers

Some auctioneers specialize in selling coins and notes. They range in size from one-man operations to those with large staffs. Some of these companies specialize in coins of the United States, while others may sell bank notes, foreign, and ancient coins as well. Other auction houses have specialty departments that are fully dedicated to selling coins.

Such auction houses have one thing in common. They want coins, notes, or sets of coins or notes that are at least one level above the average. There is no reason to accept consignments of material someone can get virtually anywhere, even if it is collectible.

You as the consignor have to judge if what you want to sell is worthy of being auctioned rather than sold outright to a coin dealer.

Once again it's important to consider your market. For example, if you have a collection of Pennsylvania transportation tokens, you don't want to consign this collection to an auction house in Chicago. You need a “home” market to realize the best possible prices.

Similarly, if you have coins worth $10,000 or more individually, it isn't a particularly good strategy to consign them to an auctioneer who conducts sales at local coin shows drawing an attendance of perhaps 300 people. The good news is the auctioneer is going to know this and watch out for situations like this. A major auction house with a national or international audience will likely decline to accept consignments that are not of the appropriate value and rarity that is expected by their potential bidders.

Major Market Specialized Auctioneers

Everyone dreams of consigning their coin or bank note collection to a major rare coin auction house with a national or an international reputation. Everyone dreams of having that auction named after themselves, with a biographical sketch of the collector included within the published auction catalog.

For most collectors this is exactly what was just described—a dream. Many times major auction houses that specialize in coins or bank notes, or have departments that specialize in these fields, have feelers out at all times to people or their heirs known to have valuable coin collections. Such auction houses know where many of the major coin collections are located, be they held by private collectors, museums, or universities. This is how they got to be major auction houses. They don't just wait for collectors or their heirs to approach them.

If you truly believe you have individual coins, notes, or sets of either that are worthy of such an auction house, don't be intimidated. Approach the company to get their opinion regarding if your material may do well in their auctions or not. Despite their size, these auction houses will still accept anything from a single item to many items that fit what they anticipate their customers will want.

Negotiating with the Auction House

If you decide to sell your coins or notes at an auction, there are some very important things to keep in mind. First, make sure that the auction house has a legal local auction license and is bonded. You also should sign a contract with the house that includes the consignor's fee, any buyer fees, and reserves.

The consignor's fee is the percentage of the price realized that the auction house keeps. Fees vary and are often competitive, especially for particularly desirable consignments. Some coin auction houses have been known to offer negative percentage fees for especially significant consignments, in other words, rather than charge the consigner, they pay the consigner an additional percentage of the price realized.

This brings up the second point to be negotiated—buyer fees. This is the fee a successful bidder is expected to pay above the actual price the successful bidder actually bid. It is typically a percentage of the successful bid. The negative buyer's fee, when offered, is paid to the consigner from this buyer's fee. Otherwise the buyer's fee will help to defray overhead the auction house must absorb.

Reserves are an important aspect of auction negotiation terms. If you have a coin estimated to be worth $1,000, why take the risk of it only realizing $200 if there is no reserve value through which the true worth is protected? If the reserve is not met, you will be expected to pay a fee in order to get that item returned to you. This reserve must be negotiated. If the item does not meet the reserve, you might want to allow the auction house a second opportunity to sell the item rather than pay them a reserve fee to get it returned to you.

Auction houses specializing in selling coins and bank notes to a national or to an international audience typically publish an illustrated catalog of what is to be offered. Some of these auction catalogs are printed in hard copy, with some of these catalogs viewable on the Internet. Do not expect smaller auction houses or individual auctioneers to publish auction catalogs, however if your collection is consigned to a major auction house you will want the right to proofread the description of what you have to sell before it is published. You will not likely have any right to demand a specific grade or description be assigned to your consignment. But if there are any inaccuracies in the description, you should have the right to have them changed prior to publication of the catalog.

An individual acting as an auctioneer or a small auction house likely lacks the resources and time to publicize an auction to the same extent as can be expected by a major auction house. The amount of publicity your consignments will receive is not a negotiable point, but it behooves you to learn just how much publicity will be drawn to the auction, and if this publicity should be sufficient for the auctioneer to successfully sell your coins or bank notes for a good price.

Also learn what the written policy of the auction house is regarding when you will be paid. Some auctioneers may pay consignors in a very short period of time following the sale, while others may require sixty or ninety days to first collect from the bidders, then to do the appropriate accounting, and finally to pay you.

This brings up the final important negotiation point. If you consign something to an auction, but the auctioneer advices you it may be a significant period of time until your consignment will be auctioned, you may want to inquire about the possibility of receiving a cash advance on your consignment. An advance, when available, is typically a percentage of what the estimate of the price to be realized will be. Ensure if you accept an advance you will not be expected to pay interest on that advance. Understand if your consignment fails to reach its estimate you may be liable to repay part or all of this cash advance.