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It would seem that the NGC Guarantee favors Dealers vs Collectors

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As a collector if I purchase a coin that is encapsulated by NGC at a given grade and I based the amount I was willing to pay for the coin off of NGC's listed values and the realized auction values I can still be left short by NGC's guarantee.

 

In order to fully take advantage of the guarantee it would seem as though you have to buy wholesale. hm

 

 

 

 

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As a collector if I purchase a coin that is encapsulated by NGC at a given grade and I based the amount I was willing to pay for the coin off of NGC's listed values and the realized auction values I can still be left short by NGC's guarantee.

 

In order to fully take advantage of the guarantee it would seem as though you have to buy wholesale. hm

 

 

 

 

I think you have mischaracterized it.

 

The guarantee applies to dealers the exact same way it applies to collectors. Anyone can pay more for a coin than the amount for which they might end up being reimbursed under the guarantee. And their status as collector or dealer isn't what determines NGC's payout under their guarantee.

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Mark please help me better understand the inner workings of being a dealer if you will.

 

I was under the impression that dealers generally subscribed to the 'grey sheet' and generally conducted much of their purchase via dealer to dealer on a platform such as http://www.certifiedcoinexchange.com/ or something similar, with the occasional good opportunity that might arise elsewhere, either through auctions or even eBay

 

Would that not be the value that NGC would base their guarantee on since it clearly states:

 

"Due to the volatile nature of the coin market and Internet auctions / sales as well as the differences in buying habits of different individuals, selling prices in these auctions / sales, do not necessarily represent the current fair market value of any particular coin. Accordingly, NGC will determine the current fair market value of a coin based upon what NGC believes, in its sole opinion, to be reliable current market information. The fair market value, as determined by NGC, represents the current average dealer buying price for an accurately graded NGC-certified coin. Any coin pricing information that appears on NGC’s Web site is supplied by license from independent third parties and does not constitute the fair market value of coins for purposes of remedy under the terms of Appearance Review. NGC's determination of fair market value shall be binding on all parties."

 

I read that as clearly stating that they will base the value of the coin at any given grade off of market data that the average collector does not have access to.

 

 

 

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Mark please help me better understand the inner workings of being a dealer if you will.

 

I was under the impression that dealers generally subscribed to the 'grey sheet' and generally conducted much of their purchase via dealer to dealer on a platform such as http://www.certifiedcoinexchange.com/ or something similar, with the occasional good opportunity that might arise elsewhere, either through auctions or even eBay

 

Would that not be the value that NGC would base their guarantee on since it clearly states:

 

"Due to the volatile nature of the coin market and Internet auctions / sales as well as the differences in buying habits of different individuals, selling prices in these auctions / sales, do not necessarily represent the current fair market value of any particular coin. Accordingly, NGC will determine the current fair market value of a coin based upon what NGC believes, in its sole opinion, to be reliable current market information. The fair market value, as determined by NGC, represents the current average dealer buying price for an accurately graded NGC-certified coin. Any coin pricing information that appears on NGC’s Web site is supplied by license from independent third parties and does not constitute the fair market value of coins for purposes of remedy under the terms of Appearance Review. NGC's determination of fair market value shall be binding on all parties."

 

I read that as clearly stating that they will base the value of the coin at any given grade off of market data that the average collector does not have access to.

 

 

 

Here are a few things to consider:

 

Collectors are free to subscribe to the "grey sheet" and CCE, as well.

 

There is a great deal of business that occurs other than through CCE transactions - most of it, in fact. Auctions, coin shows and other transactions through the mail, just to name a few major types.

 

Whatever value NGC assigns is available to collector or dealer.

 

Ultimately, regardless of the language you quoted, it is my understanding that NGC makes decisions on an individual/case by case basis.

 

While it could be said that collectors are generally more likely to have paid above "fair market value" than dealers, that's not the same thing as saying the guarantee only applies to dealers.

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Here are a few things to consider:

 

Collectors are free to subscribe to the "grey sheet" and CCE, as well.

 

Absolutely, and I never implied that they could not. However, based on a recent thread alone, about the option of a collector paying those extra fees, it seemed to be the consensus that only dealers were willing to fork over those extra fees, dues, etc.. and collectors could not justify it based on the smaller volume.

 

There is a great deal of business that occurs other than through CCE transactions - most of it, in fact. Auctions, coin shows and other transactions through the mail, just to name a few major types.

 

I acknowledged that as well, but I dispute the implication that these deals are all at wholesale prices by those that are collectors and not dealers.

 

Whatever value NGC assigns is available to collector or dealer.

 

I don't even understand why that was stated as it has already been stated in the Terms that I outlined.

 

Ultimately, regardless of the language you quoted, it is my understanding that NGC makes decisions on an individual/case by case basis.

 

Why the need for the above Terms then?

 

While it could be said that collectors are generally more likely to have paid above "fair market value" than dealers, that's not the same thing as saying the guarantee only applies to dealers.

 

That was what I was saying. Since the collector is more likely (much more likely) to pay closer to the realized auction prices (if they do their homework) or even close to, or over the list that NGC obtains from Numismedia they are at a disadvantage immediately based on the Terms governing the NGC Guarantee.

 

One can rationalize all they wish but the facts remain undisputed that a dealer is in the business to buy as low as possible and sell as high as possible, while still maintaining some level of integrity.

 

A collector, on the other hand, tries to emulate that successful model but far to often falls short and will pay much more than wholesale for a coin, and often closer to the numismedia list. If that were not the case then there would be no dealers making money. No?

 

 

 

 

 

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Here are a few things to consider:

 

Collectors are free to subscribe to the "grey sheet" and CCE, as well.

 

Absolutely, and I never implied that they could not. However, based on a recent thread alone, about the option of a collector paying those extra fees, it seemed to be the consensus that only dealers were willing to fork over those extra fees, dues, etc.. and collectors could not justify it based on the smaller volume.

 

There is a great deal of business that occurs other than through CCE transactions - most of it, in fact. Auctions, coin shows and other transactions through the mail, just to name a few major types.

 

I acknowledged that as well, but I dispute the implication that these deals are all at wholesale prices by those that are collectors and not dealers.

 

Whatever value NGC assigns is available to collector or dealer.

 

I don't even understand why that was stated as it has already been stated in the Terms that I outlined.

 

Ultimately, regardless of the language you quoted, it is my understanding that NGC makes decisions on an individual/case by case basis.

 

Why the need for the above Terms then?

 

While it could be said that collectors are generally more likely to have paid above "fair market value" than dealers, that's not the same thing as saying the guarantee only applies to dealers.

 

That was what I was saying. Since the collector is more likely (much more likely) to pay closer to the realized auction prices (if they do their homework) or even close to, or over the list that NGC obtains from Numismedia they are at a disadvantage immediately based on the Terms governing the NGC Guarantee.

 

One can rationalize all they wish but the facts remain undisputed that a dealer is in the business to buy as low as possible and sell as high as possible, while still maintaining some level of integrity.

 

A collector, on the other hand, tries to emulate that successful model but far to often falls short and will pay much more than wholesale for a coin, and often closer to the numismedia list. If that were not the case then there would be no dealers making money. No?

 

 

 

 

 

Sorry, even if I were to agree with everything you wrote above, that would not lead me to the conclusion you stated in this thread's title.

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I agree and meant to change the title last response but forgot since it took so long to create the response.

 

I will change that now to a more accurate observation instead of an all encompassing generalization.

 

 

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Let me pose you a scenario. If you paid $5000 for a coin that is on the greysheet for $10, and it turns out to be a fake that just slipped through, how much do you believe NGC should reimburse you?

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James, you have a little experience in this 'guarantee' area if I remember correctly. :grin:

 

To answer your question; that is quite a wide spread so it is hard for me to actually conceptualize that scenario. However, I can offer an alternate scenario that would be much more realistic and the reason I even brought this topic up.

 

OK. I am going to post two identical coins, both of which I have owned or currently own, and the examples presented might shed some light on where I am coming from.

 

There will be no guess the grade and I will be upfront with the costs associated with each coin.

 

This first coin I purchased raw and submitted to NGC. It was clearly a PL coin but I can accept the fact that they did not see fit to designate it as such on the first go around. The new owner will probably have much better luck than I. The coin is in a MS65 NGC holder. I had a little over or under $140.00 in that coin.

 

1883_Liberty_V_Nickel_No_Cents_With_Label.jpg

 

 

Now the second coin has many more imperfections on it and I would say that at the very least the grades are reversed. I did not submit this coin. I bought it already graded. When I received the coin I was somewhat surprised that anyone would have labeled this coin as a MS66. I have $287.95 in this coin that has a list of $435.00 on NGC and the Realized Auction Results compliment that listed value.

 

1883NoCentsV_Nicke_With_Label.jpg

 

 

In my opinion it is very clear that the MS66 coin was over graded and the MS65 coin was under graded. Now, I do not know what the 'Grey Sheet' for this particular coin in MS66 is but I can make a pretty confident guess that it is not near $400.00

 

Feb 5, 2014 HA MS66 NGC $499.38

Jan 11, 2014 HA MS66 PCGS $470.00

Feb 5, 2014 HA MS66 NGC $282.00

 

Average: $417.12

 

What should they allow if the Grey Sheet value is $250.00 ... I bought the coin based on the pictures, NGC's word and reputation.

 

Now some can tell me who was at fault here? Not the seller - they did not grade the coin. Was it me because I saw an opportunity to purchase a coin that would allow me to have some equity? Should I be penalized to teach me a lesson?

 

 

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I do not believe NGC would be using a greysheet value for such a coin since there is known historical sales information available from multiple auctions houses. I would assume that based on the price you paid you would do fine under there grade guarantee or are you wanting to pay $286 and then have them pay you $400 or the difference between the two prices via the grade guarantee....I am a bit confused on that point.

 

In reading the rest of your thread I have to agree with Mark......this really has nothing to do with dealers vs collectors....if a dealer buys a coin and sells it for a markup aka fair market value and then why would the buyer who pays the fair market value get screwed by NGCs grade guarantee? I also think your assumptions as to how cheaply dealers get coins is way off base. I buy from the same auctions that collectors have access to and I buy from dealers at shows just like collectors can do and I don't have any dealers selling coins to me at wholesale levels. When your a good dealer you know how to by coins for fair market value that are actually worth more so you can get your mark up.

 

We all know of coins that are overvalued and undervalued at current market prices so being able to get your hands on the coins priced too cheap is a big part of the dealer experience.

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Shane,

All very valid points and to clear up my expectations, I never purchased this coin, after researching and seeing a recent Average Auction Realized price of $417.12 and a NGC Numismedia List of $435.00 and then thought I will buy this ugly over graded coin for $287.95 and then should be able to make at least $130.00 based off of the NGC guarantee.

 

I bought this coin wanting the higher grade for my personal collection. I was very disappointed when I saw that NGC had deemed this coin a MS66 when I had just recently sold another forum member a NGC graded MS65 (that should have been PL) which looks much better than this MS66.

 

That lead me to thoroughly read the the guarantee and was surprised to find that even though I purchased the MS66 coin based on the above two mentioned and researched values, I am sitting with a coin that should probably be graded as a MS64 or less in my opinion.

 

I would love to know what the Grey Sheet is for this particular coin in this grade. At least that way I can either validate my perceived disparity between dealers and collectors or debunk it, if I were to send it in for a review.

 

 

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Kenny you should really try reading the entire thread before posting. Your information would then likely be a greater benefit. ;)

 

 

I will ad also that no one seems to be willing to let me know what the grey sheet lists as a value for this coin in this particular grade. Why?

 

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Kenny you should really try reading the entire thread before posting. Your information would then likely be a greater benefit. ;)

 

 

I will ad also that no one seems to be willing to let me know what the grey sheet lists as a value for this coin in this particular grade. Why?

 

 

Pure and simple...I don't have one...don't use one...don't see the value in them as I try to get my hands on above average or eye appealing specimens and I don 't think the grey sheet would have any correlation to what I pay or would be willing to pay. sorry

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No opinions on this example?

 

 

Unfortunately, the pictures provided do not make it very clear that either coin is incorrectly graded; and it is certainly not possible to compare images taken under what looks like completely different lighting.

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Shane,

All very valid points and to clear up my expectations, I never purchased this coin, after researching and seeing a recent Average Auction Realized price of $417.12 and a NGC Numismedia List of $435.00 and then thought I will buy this ugly over graded coin for $287.95 and then should be able to make at least $130.00 based off of the NGC guarantee.

 

I bought this coin wanting the higher grade for my personal collection. I was very disappointed when I saw that NGC had deemed this coin a MS66 when I had just recently sold another forum member a NGC graded MS65 (that should have been PL) which looks much better than this MS66.

 

That lead me to thoroughly read the the guarantee and was surprised to find that even though I purchased the MS66 coin based on the above two mentioned and researched values, I am sitting with a coin that should probably be graded as a MS64 or less in my opinion.

 

I would love to know what the Grey Sheet is for this particular coin in this grade. At least that way I can either validate my perceived disparity between dealers and collectors or debunk it, if I were to send it in for a review.

 

 

Keep in mind that PL and non-PL coins will grade very differently, even with the same surface marks.

 

Also, this example does not have anything to do with the NGC guarantee, because you did not request to have the coin downgraded. My advice would be to submit it if you think it is overgraded. They have been very fair with my downgrades, and they generally did not quote me wholesale price points.

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Unfortunately, the pictures provided do not make it very clear that either coin is incorrectly graded

 

Apparently they were clear enough for you to make the following point, yourself calling one a PL (shrug)

 

Keep in mind that PL and non-PL coins will grade very differently, even with the same surface marks.

 

Yes - just as they will look as though they were taken with different lighting based upon one being reflective and the other not. That picture of the MS66 just happens to be the most flattering picture that I took of it. Maybe I should have thrown up one of the not so flattering pictures I have. I have another picture of the MS65 that really shows the reflection of the mirrors but I choose not to use that since I wanted the conditions to be similar.

 

Also, this example does not have anything to do with the NGC guarantee, because you did not request to have the coin downgraded.

 

I respectfully disagree and think it has everything to do with NGC's guarantee. I never claimed to have sent the coin in as of yet. I am in the preliminary stage and wanted to read the terms, once again, before I attempted to do just what you are referring to. It was while reading the terms there were a couple of points that made me question whether it was worth my time.

 

I will also add that earlier you had mentioned "I wouldn't say that your title is accurate at all."; However, I stated earlier in the thread that I meant to change the title (which I did prior to your post) to "It would seem that the NGC Guarantee favors Dealers vs Collectors". This of course would be completely accurate as it is describing the way that I felt after reading the terms.

 

My advice would be to submit it if you think it is overgraded. They have been very fair with my downgrades, and they generally did not quote me wholesale price points.

 

I have every intention of doing just that. First I want to obtain an accurately graded MS66 as I had set out to do originally. Once I do submit for a review I can only hope that my experience can equal your experience.

 

 

Now I can hit 'Submit' since I now have a real MS66 .. :)

 

 

 

 

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Unfortunately, the pictures provided do not make it very clear that either coin is incorrectly graded

 

Apparently they were clear enough for you to make the following point, yourself calling one a PL (shrug)

 

Keep in mind that PL and non-PL coins will grade very differently, even with the same surface marks.

 

Yes - just as they will look as though they were taken with different lighting based upon one being reflective and the other not. That picture of the MS66 just happens to be the most flattering picture that I took of it. Maybe I should have thrown up one of the not so flattering pictures I have. I have another picture of the MS65 that really shows the reflection of the mirrors but I choose not to use that since I wanted the conditions to be similar.

 

Also, this example does not have anything to do with the NGC guarantee, because you did not request to have the coin downgraded.

 

I respectfully disagree and think it has everything to do with NGC's guarantee. I never claimed to have sent the coin in as of yet. I am in the preliminary stage and wanted to read the terms, once again, before I attempted to do just what you are referring to. It was while reading the terms there were a couple of points that made me question whether it was worth my time.

 

I will also add that earlier you had mentioned "I wouldn't say that your title is accurate at all."; However, I stated earlier in the thread that I meant to change the title (which I did prior to your post) to "It would seem that the NGC Guarantee favors Dealers vs Collectors". This of course would be completely accurate as it is describing the way that I felt after reading the terms.

 

My advice would be to submit it if you think it is overgraded. They have been very fair with my downgrades, and they generally did not quote me wholesale price points.

 

I have every intention of doing just that. First I want to obtain an accurately graded MS66 as I had set out to do originally. Once I do submit for a review I can only hope that my experience can equal your experience.

 

 

Now I can hit 'Submit' since I now have a real MS66 .. :)

 

 

 

 

Actually, you called it PL, not me. It does appear to be more glassy than the other piece, which looks more frosty, but many 1883 nickels are semi-reflective. Neither of these observations help me grade the coins, however.

 

The negative experience you underwent was the result of the two coins appearing to be graded inconsistently, not because of a problem with the NGC guarantee. That is what I was trying to say.

 

Good luck with your submission.

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I will ad also that no one seems to be willing to let me know what the grey sheet lists as a value for this coin in this particular grade. Why?

 

I don't have an up to date Grey Sheet, but you can buy individual digital copies for $5.

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Nothing in the photos leads me to believe the second coin is overgraded at MS-66.

 

Greysheet for MS-65 is 170, and of course there is no greysheet value for MS-66.

 

Bluesheet is 135 for MS-65, 225 for MS-66, FWIW.

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James, Thank You.

 

You, and others, may be correct in suggesting it is not over graded. The strike is strong on just about all the stars and I tend to miss details often.

 

Coinman all very valid points and Mark was right in the beginning when he questioned my title. I changed the title but still I should have had more faith in NGC than to base a claim questioning the guarantee when I have never utilized it.

 

I am aware than I am in error in this thread.

 

On a positive note; thank's for all the good advice and opinions.

 

 

 

 

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I am aware than I am in error in this thread.

 

On a positive note; thank's for all the good advice and opinions.

I wouldn't say you are "in error" :) ! The beauty of this hobby is that everyone is entitled to his opinion as to both "grade" and "value".

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James, Thank You.

 

You, and others, may be correct in suggesting it is not over graded. The strike is strong on just about all the stars and I tend to miss details often.

 

Coinman all very valid points and Mark was right in the beginning when he questioned my title. I changed the title but still I should have had more faith in NGC than to base a claim questioning the guarantee when I have never utilized it.

 

I am aware than I am in error in this thread.

 

On a positive note; thank's for all the good advice and opinions.

 

 

 

 

It is possible you may have an over-graded coin. I just can't see it in the provided image, or in a comparison of the two coins.

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I took a couple of other pictures under better conditions and they seem to be closer to the grade I guess.

 

new_obverse.jpg

new_reverse.jpg

 

And the mistake I made, that I referenced, was questioning the guarantee policy when I have never attempted to use it. Instead I was doing as I have accused others; seeing policy in black and white with no shades of grey.

 

 

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