Pros and Cons of Buying Coins at Auction

Pros and Cons of Buying Coins at Auction

In a coin collection, the most challenging part is how to find the coins for the collection. A collector’s primary method of acquiring coins is by buying them. The most common alternative to acquiring a coin is through purchase in auction sales, and that's why we should know about the pros and cons of buying coins at auction.

Rare coins and those that are of high quality are tough to buy. Auction sales, online or at auction houses, offer coin buyers the option to acquire these coins at lower prices. Online auction sales usually take 3 to 4 months to process, depending on how fast bidders can decide on their bids or when the bidding process closes.

No matter how popular auction sales have become to many collectors, it is still essential to know the advantages and disadvantages they can provide to coin collectors. Here are some points that you must consider before buying in auction sales.

Pros of Buying Coins at Auction

  1. Auction sales provide more straightforward negotiations and are the simplest way of buying coins for a collection. It is because of the fixed price that is reserved for the coin. It is easier to weigh options and estimate the cost of the coin.
  2. Auction sales include a bidding process. Buyers will only need to bid to the price they are willing to pay for a specific coin. It means that you will acquire a coin within the allotted budget of the buyer. If a buyer likes a coin, he can bid at a higher price, so there is a higher possibility of winning the bid.
  3. If the bidder who won the item was refused for whatever reason, it is still possible to get it. It may also happen when the reserved price for the coin is not met. When this happens, the item for bidding is usually passed, meaning that the item will not be sold, and the bidding will be re-opened soon.
  4. Contracts are involved in the bidding process. Once a buyer wins a bid for a specific coin, contracts will be exchanged immediately between the successful bidder and the seller. It will ensure that the negotiation is completed and the bid price of the item is confirmed.
  5. The person who has the highest bid may be allowed to make a deposit payment. It will ensure they reserve the item for the person who won the bid. Deposits may be a fraction of the whole amount of the coin.

Cons of Buying Coins at Auction

  1. When buying in online auction sales, there is a higher chance of fraud. It is because the negotiation is done online. The buyer does not see the person selling the item or know if the other bidders are real people bidding for the item.
  2. There are also instances where the item displayed on the website before the bid differs from one they delivered to the bidder. It is recommended that the buyer ensure that the same thing he bid for is the one they will provide to him.
  3. The reserved price of the item may also cause some disadvantages. There are times when the reserved price set on the item is higher than what the buyer expected. It will force the buyer to bid higher and exceed the budget allotted for the item.
  4. Online auctions cannot ensure the buyers that what they are bidding for is a genuine item. The buyers will only be able to inspect the coin once they have won the bid and delivered the item. It may lead to fraud, and the buyer regrets that he bid for the item.

Auction sales may be popular, but it is still strongly advised that buyers need to be aware of the pros and cons of this option. Buyers also must be familiar with their rights as consumers and buyers. You may also consider other options before choosing the auction sale option in acquiring coins for collection.

Collectors may consider buying from friends or agents they know, but if they still want to buy in auction sales, they need to ensure that the website or the auction house has no record of illegal activities. Buyers should also spend some time reading reviews about the sellers to ensure they are dealing with credible people.

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