Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

I'm buying a half bag ($500 face) of junk 90% silver today from a private party. This is my first time buying like this and wanted to avoid any pitfalls. Any suggestions would be appreciated. Here are my concerns:

(1) I'm buying at about melt. It was a little more than melt yesterday, it is a little less today. It looks like that is about dead center between buy and sell at the big coin dealers. It seems fair for both the seller and me. Is it fair?

(2) I think the coins are a little better than just "junk". The lot consists of $150 in Mercs, $120 Standing Liberty 1/4's, and $230 in Walking Liberty 1/2's. Is this a good thing? Is there a problem with these old coins? (I know that they can be worn down sometimes and not have their full weight, but the seller says they are not worn like that--I haven't seen them yet.)

(3) We plan to meet in a bank, where he can deposit the funds in his account. I will pay by cashier's check. This seems prudent enough for me. Is it?

Thanks in advance for any advice. Believe me, all will be appreciated.

-Willie

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

Here's my silver dimes worth of advice...

Buy by the weight!

I have seen, many, many 90% coins and the old ones you describe are always considerably worn. A stack of an equal number of the old coins are always shorter than new ones by comparison. Shorter stack means less silver.

However, if they truly are not as worn as he says they may have some numismatic value.

Also, wait until Friday and you'll get a better price.:applause_

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

If all is as you say - the deal seems well structured.
Public place, guaranteed funds and immediately recognizable 90% goods.

Just don't leave the goods with bank post purchase - the mantra of "if you don't hold it...." applies.

ST

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

I wouldn't buy that much from a private party unless you have the means to inspect the coins first. Is he just going to hand you a bag and you hand him the cash? What if you take it home and there's clad in the bag? I'd want to see each and every coin's silver edge before I made the deal.

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

Thanks for the replies, guys.

The coins are not in a bag, but are in a box in plastic tubes. Some clear, and some those whiteish semi-opaque square things. I will spot check random ones of them. My check will be to verify that they are real, and that his description is correct. If they are all worn to hell, I just won't do the deal. And obviously if they are clad, I won't either.

Nobody has addressed the issue of whether "about melt value" is a fair price for both of us. Personally I think that the additional value of them being old might make up for some greater than average wear.

Again, thanks for the replies.

-Willie

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

I'm no junk expert, but buying at less than spot/melt is a good deal for you. APMEX at best sells at spot for $500 and $1000 face value.

Given the choice, I'd personally prefer the older coins. Liberties and Mercs over Kennedys and Roosies all day and twice on Sunday. Good luck with your transaction, some pics would be cool.

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

Willie,

"Fair" is irrelevant and impossible to define. If he's happy, and you're happy, do the deal.

Though I have no clue why all you guys don't buy by weight when you're dealing with junk silver... :confused_m:

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

One of these days when silver takes off, people will buy and sell it by weight. It simply hasn't started yet that I know of. It certainly is a good idea because the coins have no numismatic value and never will be used at face value, they are only bought for the silver content.
Whenever it starts, you guys who bought 1964 Kennedy halves will be congratulating yourselves and those who bought Walking Liberties and such will see that you could have gotten more bang for your buck.
Anyway, I'd open at least half the tubes and look for the orange edge of clad coins. I usually set open tubes next to each other with the tops off to compare height and only count the shortest ones.

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

I'd especially watch the SLs, those tend to be very worn. Since they're in rolls, you can spot out the quarter rolls. Mercs in the 30s & 40s are usually good. WLs in teh 40s are good.

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

Back when silver hit $50 an ounce, junk silver was still being bought and sold by face value.

I suspect that your right though if silver goes to the moon..well beyond the $50 then dealers will sell by face, and then buy by weight.

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

Here is my formula:

Spot X 68% is my highest buy price for 90%
Spot X 72.5% is my lowest sell price.
This formula is for large quantity transactions, $500 or $1000 face value.
So, I can work off of 6.5% profit.

If spot is $18.53 per ounce (spot price as of this post), I will pay $12.60 X face
And, I will sell for $13.43 X face
13.43/12.60 = 1.0658 (6.58% Profit Margin)

Small transactions, I can usually pay slightly less, maybe 0.65 X Spot per dollar of 90%.
This lower rate is for $20 or $50 face value of 90%.

Normally, people have a mix of low grade/circ/higher grade coin from fifties and sixties.

Everyone buys/sells based on face value, not scale weight. Even heavily circulated coin is only a few percentage points under 0.715 ounces per dollar, nothing to worry about.

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

BTW if you're paying 1334.65% (current melt) or $6,673.25, personally, I'd say youre paying too much. In a way, you're doing him a favor by buying in bulk & local, so he should cut you a better deal. If it was me on the sell side, I'd have cut you a better deal.

That's just my opinion. 12.5x face is probably the most that I would pay, assuming the coins are in decent condition. I'd have offered him $6k at the most, and if he declined, walked away. A "no brainer" buy at this time is 11.5x or below. I just picked up a decent lot (maybe $600 current value) of mixed coins (4x for 40%, 11x for 90%, mixed morgans & peace for $13 each.)

I consider that to be an "ok" deal, given that silver was recently low $16s. If I was selling & not accumulating junk silver, I'd easily sell it to you for 13.34x face shipped.

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

I no longer buy 90% without completely inspecting what I am buying... no more blind mystery bags. I also no longer buy mercs, walking liberties, or any of the really older heavily worn coins. You are buying these coins for their silver content so why pay premium face value based pricing for worn out coins.

I weighed my last larger batch of 90% and they did not weigh the 71.5 ounce average per $100 face. In other words... buyer beware on mystery uninspected bags of 90%. You may be buying someones cast offs and a lot of smooth silver discs... I speak from experience unfortunately.

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

Back in the late 70's it may not have been a big problem but we are 30+ years beyond, a lot of those coins have changed hands many times.

I vote to buy by weight but if it looks legit and you respect the seller you might just go for it.

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

Thanks everyone for your comments. I went ahead and bought the coins. They are pretty and all, but after a purchase of this size there is always a bit of wondering if you did the right thing when it is all over.

If silver drops, I will write it off as a "learning experience". If it goes up, I'll pat myself on the back.

Anyway, someone asked if I could post photos. Let's see if I can make them work.............

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

Looks like the photos worked. That was a first for me. I wish they were better but I was using my wife's camera and I couldn't get the flash to work.

-Willie

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

90% is always bought and sold buy weight.

The use of the term face value is to standardize a multiplier, ie: $1000 face=715ozt. (established averg. weight), $500=357.5ozt., $100=71.5ozt., $10=7.15ozt., $1.00=.715ozt, etc.

If you are fortunate to get a bag of uncirculated '64 Kennedy's, then you got about 724ozt. (uncirculated weight) per $1000 face and paid for only 715ozt.

But then I may have gotten the last one (damn that boat).

:smile:

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

Bottom Line: YOU SWAPPED PAPER FOR SOMETHING REAL... GREAT TRADE.


:RockOn::RockOn::RockOn::RockOn:


T

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

would you mind doing closeups? If the room is well lit, you should be able to use the macro (flower icon). Dont use flash.

From what I can tell, those SLs are actually in pretty decent condition for SLs. Check if you have anything pre 1925. Those tend to have numis premiums attached to themn. Hell, if I were you, I'd go through the entire shipment before storing it away and seeing if you have anything valuable. If you do, then you can sell it to buy more.

The square tubes are a plus as well. Usually they're in paper wrappers.

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

90% is generally sold by face value and not weight. 715 toz is the established average weight, however it's not used explicitly in the calculation of price. If 90% was bought & sold by weight, then all the dealers would simply say 700 toz or 730 toz of junk silver and list a price. Face value would be completely irrelevant. Instead, BD, APMEX, local dealers, etc assumes the coins should be "average" and sell by face, $100, $500, $1000 face bags.

Of course if the coins tend to have more meat on them like halves, they can command a higher premium (or multiple X face) than other junk silver because it's asumed that the average weight is higher. Which is why apmex, bd, etc have separate listings for $100, $500, etc face bags of halves.

At least on ebay, when people attempt to sell by weight, it's to confuse the buyer into gettting ripped off.

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

If this is your initial foray into PMs, I'd say you did good. If you already had a hoard, then you'd have more wiggle room on pricing. The type of coins you bought also tend to hold a bigger numismatic premium over the newer coins.

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

Downside risk from here? 2 bucks (per ounce)

Upside potential? Unlimited.

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

You have anyway of weighing them up? actually the SL's and WL's don't look too bad at all, from what you can see...

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

I give up.

:smile:

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

It's not exactly rocket science. If they only list one weight, you assume it's the raw weight, and you know that 90% of that is silver.

It's not just a seller's responsibility to be honest - it's also a buyer's responsibility to know what they're doing.

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

That looks like a really nice pile.

I'm happy for you, congratulations.:23_31_2:

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

TRUE. But 1/2 the time on ebay, the sellers arent even using troy ounces. If you run the conversion, sometimes they're selling at something like 16x face or more for normal junk. The same is true when they're selling "1/2 pounds" or "pounds" and dont tell you which one. Could be 6 toz, 6oz, 8 toz, or 8 oz. That's not to say that all sellers are trying to rip you off when using weight. It's just something that really flagrant on ebay, and why I dislike the measure.

The best would be if you have both pieces of info. $1000 face, 725 toz would let you know for the face value, the average weight of the coins is over the "official average". Or if it was $1050 & 715 toz, you probably have a ton of slicks, but the batch still is equal weight wise to the normal average.

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

It does drive me nuts when they don't distinguish between ozt and oz. The worst is when they sell it by the "pound" and don't tell you if it's troy pounds or not.

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

Confusion has a motive. Why buy from someone trying to deceive you? If anyone tried to sell me silver per avoirdupois ounce or per pound I'd walk off and make a point never to deal with them on anything.
If you find that someone has deceived you on one thing, you can never be sure what they will deceive you on next.
The only exception would be if you're dealing with someone so ignorant they don't know the difference between troy and avoirdupois, or that troy ounces of PM's are never calculated in troy pounds or any kind of pounds, no matter how heavy it is.

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

In total agreement! Look slike a great score.

Happy times!!! :5_1_120:

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

Anybody storing in tubes and ammo boxes must have had, or at least believed they had, a better than the average $500 junk bag. It looks more like a collection somebody has been putting together over the years and decided to dump $500 face of his stash. There are no obvious slicks and the overall quality appears to be good. I would say you did very well, especially if this was a first purchase. You could always pull the better ones, break them down into smaller lots and make your money back plus a small premium. As mentioned, there is a good chance you have some numi value in the older coins, make sure you look through ALL of them before reselling.

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

A couple of final things about this purchase:

First, it didn't come in the ammo cans, I took them with me to haul it home. (Glad I did, too, since he had it in baggies that were ripping from the weight of the coin rolls.)

I purchased the ammo cans from a garage sale @$3 each. Apparently there is a company that sells Nicaraguan cigars and ships them in those cans. They line them with wood to make them look nice.

Second: Yes, I know that these are for long term storage and not short term investment, I just keep going back to that mindset. I guess it is just habit.

Third: Someone asked me to post close up photos. I snapped a few with my camera, and couldn't get very close. Here is the best I can do:

Well, I couldn't upload most of the files, sorry. I think I shot them in too high of a resolution. (8 megapixels?) Whatever the reason they didn't work.

Sorry. My camera sucks........it is a video camera that will take stills....apparently not very well, though.

-Willie

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

That photo wasn't worth posting, now that I see it. I'll have to learn how to use my other camera. This is good practice, so thanks for asking me to do it. I'm trying to fight the "old pharts syndrome" of avoiding new technology. I'm only 54 and it is already beginning to set in.

-Willie

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

I love them quarters - you don't see them for bulk 90% purchases often - if at all. I purchased as many as I could back in the mid 90's from spot bins....walking halfs are the next best thing...

Good score - grats.

If you decide to get rid of your 90%, let me know.

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

You made a very good score. Enjoy. Those older coins usually sell with a premium over regular junk regardless of the weight.

I sold quite a few rolls of the walkers on ebay and always came out way over melt. In fact, the Walkers sold with a higher premium than fresh Mint tubes of SAE's. I always sold them starting at $0.99 and they always got bid way up. I sold them as regular 90% in which the date was still legible.

In fact, I was selling them at around $20 per oz when melt was only $11 or $12.

Crazy, I know, but that was back in 08 when silver got scarce for a couple months and people were getting nervous.

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

I think you did OK too. If silver drops back down to $10. where it was a year ago the collectible coins would have very little downside left.

I would like to see some better pictures also to see if they are collectible. Have you checked for rarer dates? One problem with "junk" silver is the lots are often put together by dealers who toss all problem coins from bulk purchases in a bucket and then sell as junk. This means if they have scratches, edge dents, cleaned or just too much wear. Hope this is not the case with your lot.

I hope you or someone else can clear up something for me that has been mentioned here. A lot of people assume that well worn coins weigh significantly less than when first made. But I read an article years ago that claimed that there is very little weight loss, that the metal is simply flattened out and is not due to loss. If you look at the rims on a new coin they are thin but when it is worn they are wider.

I have done some testing but I just don't have a good enough scale or a large bunch of worn coins. So if someone with a good scale can check this I would really like to see the results. 20 silver quarters should weigh 125 grams, 20 silver halves should weigh 250 grams.

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

Take a look at the posts below for some data on the amount of wear. My conclusion was that there is surprisingly little wear by weight.

http://goldismoney.info/forums/showt...805#post533805

http://goldismoney.info/forums/showt...422#post473422

http://goldismoney.info/forums/showt...553#post473553

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

Those look very low wear, and would command a premium to spot in my market. You got a steal.

APMEX is a smart exit strategy. If you take coin silver to a refiner, they'll take you to the cleaners.

Thanks for the pictures!:bear_w00t:

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

coin stores run by decent folks are the best place both to and fro.

IMVHO

besides you get to know the character and the characters you are dealing with....

otherwise....:headsand:

Re: Buying 1/2 Bag 90% From Private Party Today: Suggestions
 

Thanks Weatherman,

I figured it must have been discussed here before. Good thing to know when making deals.

slug