Tag Archives: Coin

The Art of Finding the Value of Rare Coins

Many people dream about owning a piece of history. One of the most popular ways to accomplish this is through the ownership of coins. Ancient coins hold a magical attraction. Did the coin from biblical Israel circulate in Solomon’s temple in Jerusalem? Then there are coins that are literally brought up from the depths of the ocean. Prior to the Civil War, the SS Central American, a side wheel steamer, sank in a hurricane in September, 1857 off the coast of the Carolinas. The ship was carrying 30,000 pounds of gold, which came from the San Francisco mint. The impact of the loss was so great, that it contributed to the panic of 1857.

In 1988, the ship was located in the depths of the Atlantic Ocean. Since the gold, now with an estimated value of somewhere between $100 – $150 million, has captured the imagination of the collecting public. These recovered coins are highly sought after by gold coin collectors.

The Role of the Appraiser

Regardless of how the discovery of that long-forgotten coin or collection came about, you will want to bring in the professional appraisers, for any number of reasons: estate taxes, equitable distribution, donations to charitable groups such as museums, or for eventual sale. Many people have trusts. With the passing of the first spouse, the trusts must be appraised to re-establish the basis of the estate. Whatever the reasons, you will want to hire an appraiser who is accredited and certified numismatic experience with the American Society of Appraisers (ASA, for short).

Factors in Valuing Rare Coins

To start a numismatic appraisal, an inventory list has to be made. There are four primary factors which determine value, that is, how much the marketplace determines what people will pay.

First is the denomination, such as a $20 gold coin. This is the face value of the coin, which never changes, for it is part of the minting process.

Second is the mint mark (if any). This means what mint the coin was made. Like the denomination, this is also part of the minting process and never changes. The location of the mint mark varies from denomination to denomination. Some are on the obverse (front), just below the date. Others are on the reverse under the eagle tail feathers, such as the Morgan dollar. Coins made at the Carson City Mint usually have greater value then coins made at other mints because so few were made.

Third is the date (year) on the coin. Like the denomination and mint mark, this is also part of the minting process and never changes.  Japanese coins do not represent the calendar year as is the custom in the western nations, but the number of years the emperor has been on the throne. Islamic coins reflect the year on the Islamic calendar.

Lastly is the grade. This is the amount of wear (physical condition) on the coin. This is the big variable in determining the value of the coin. Wear can never be reversed and the degree of wear determines the grade which is used by dealers and grading services. Coins in pristine condition and high eye appeal are generally worth more than a coin which is badly corroded or has nicks and scratches.

Like all other commodities and goods, the laws of supply and demand play an important role in determining the value of coins. For example, in 1916, the Winged Liberty Head dime was minted at three different mints. At the Philadelphia and San Francisco mints, millions were produced. However, at the Denver mint, a little more than 250,000 were minted. The Denver coins are highly sought because of the low mintage.

Counterfeit coins

Numismatic appraisers have to constantly be aware of counterfeit coins. This is especially true of coins made in the ancient world, such as Greek, Roman and Islamic. An estimated one-third of coins from the ancient world are counterfeit. Only a specialist in these coins can tell the difference from legitimate minted coins from its counterfeits. To help determine the validity of the coins, some coins have to be sent to a grading service, which authenticates the coins, then determines the grade. Grading services are independent third party companies that verify if the coin was made by a government mint or produced by counterfeiters.

Coins Minted with Errors

Occasionally, the mint produces coins which have errors. So-called error coins are legal to own. A typical example of an error coin includes die rotation. A die rotation happens when the die accidentally slips and turns, but is not caught by mint officials. The obverse and the reverse designs are normally opposed by 180 degrees. If a die rotates, and the reverse is other than 180 degrees, you have an error coin. Not surprisingly, many coins that contain mistakes actually have considerable value since mistakes do not happen often. Many people specialize in collecting error coins and are willing to pay a premium.

Disposing the Coins 

In today’s world, many heirs chose not to keep the property their parents or grandparents had for decades, opting instead to sell the items and take the cash. This can be accomplished several ways: (1) selling rare coins at auction; (2) working with a coin broker (not a local coin dealer) who has a world-wide business; (3) selling the coins to a private party, or (4) selling to another heir who would rather have the highly valued coins as a form of investment or for their beauty, similar to a piece of art. Frequently, the trust often specifies that property be distributed by equitable distribution. What is important to remember is that federal law allows the trustees and heirs of estates up to nine months to start the appraisal process. Regardless when the appraisal is performed, the values that must be present in the appraisal report reflect the values at the date of death, not the date the items were reviewed.