Buying Coins on s!

I wrote the below before okay instituted its policy regarding encapsulated coin listings (where only PCGS, NGC, NCS, ANACS, etc. may be listed by grade). That policy, in part, addressed the worst of the problems noted below, but I think much of the below is still appropriate (especially the caution that some great coins may be in non-okay approved holders; or as the true greats will tell you, buy the coin not the holder). The greatest risk we (okay coin buyers) face currently is without a doubt the influx of increasingly sophisticated Chinese counterfeit coins. If you're not familiar with this threat, I invite you to read back issues of Coin World (and other coin publications) that detail the problem. For me, the key to being a happy okay coin customer is being careful--buy from sellers you have trust in, bid on auctions you have confidence in, and always take a sniff (figurative, not literal!); if an auction is too good to be true (1889 CC AU Morgan dollar, only $1,200!), then it probably is. Have fun...
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Buying coins on okay can be risky. Unless you have a very good picture of each and every coin up for bid (which is impossiblefor a large lot of coins), you just have no idea what you are bidding on (beyond generic seller terms such as Silver, Gold, Ancient, Unsearched, etc.). To reduce your risk, you might only bid on coins slabbed (aka encapsulated) and graded/certified by an independent agency. Unfortunately, not all coin grading services are created (or grade) equally. Plus, if you only bid on slabbed coins, you can miss all the fun and excitement of going through a large lot of "raw" (ungraded and/or unsearched) coins looking for that rare date or error coin. So what to do?
Here are some ideas for you when you're buying coins on okay:
1. Make sure the item description is clear. Lots should be "fixed" when placed up for bid (some sellers will base what you win on what you pay, I can't regemend ever getting involved in this type of auction...again, half the fun of bidding on coins is the excitement of getting something rare--not likely when the seller is matching your bid with coins instead of you getting to match your bid to their coins). Each lot should be explained in detailed as possible. Don't be surprised if you bid on "850 Old US Coins" and 800 of them turn out to be later/gemon date wheat cents.
2. You should have a clear idea of the condition/quality of the coins up for bid, especially if the item description lacks detail. For example, if a lot included a roll of "Buffalo Nickels" but no other details, you could be getting a roll of no date Buffs (worth a nickel each), or a high quality roll with full dates (and worth much more as investment coins). If the seller is not specific, ask! If the seller is evasive ("I don't know, I never opened the roll") or doesn't answer, that is a warning that the coins might be on the lower end.
3. Be wary of item descriptions that tell you how much the lot is worth. Coin values are tricky at best. Most sellers state up front (and appropriately) that coin grading is subjective (two experts can vary considerably on what grade they might give the same coin, with potentially huge differences in value). Make up your own mind on how much a lot (from a single, well pictured coin to a whole bunch of different coins) might be worth. You'll read below on the tricks and hazards of "certified" coins; usually they will form the basis for the seller's value claim. Depending on the gepany doing the grading, this could be dramatically over-stated. Your best defense is to do some quick research on any lot that catches your interest. There are quarterly magazines and annual books that do a good job of giving an idea of current coin values (I use the latest Blackbook Price Guide to United States Coins to start with and go from there).
About Raw Coins: Raw coins are fun. At least to me. I love to look through an "unsearched" roll of wheat pennies or Mercury dimes, or an old jar of silver coins from Dad's basement, trying to find that key/rare date and mint mark or error coin or surprise! a Morgan silver dollar. Unfortunately, you have to look pretty hard to find these kind of truly unsearched lots when bidding on okay. You have to read carefully (and sometimes between the lines) to separate the true "estate" sales and unsearched lots from some dealer's culled coins. I have found a few of these, and they are awesome. These are usually consignments sold through a third party on okay (so keep your eyes open for those kinds of sales if you are interested in these types of lots). You can also find some nice proof and uncirculated coins, usually in 2x2 inch cards, from sets where the more valuable coins have been sent to a grading service. I've won some truly beautiful coins at a fraction of their value in these kinds of auctions...otherwise, just look for what you need. What do you collect? Focus on those, bid on sales from reputable sellers, look for the bargain. Basically, just what we all do on okay every day anyways!
About Slabbed Coins: At first, I (naively) thought that all grading services were honest and above board. Far from it. After getting a lot of slabbed coins (the dealer shall remain nameless, but you know who you are!), where a set of Westward Ho Nickels were all graded MS-70 when obviously they were MS-60 at best, I felt the pain of "third tier rating services." I then went to the other extreme, "All coin grading services are liars and cheaters!" This too, is far from the truth. Here is what my current assessment is:

First Tier Grading Services: In the Coin Dealer Newsletter (which you can accessthe front ofon-line), there are currently eight (and only eight) grading services rated (their Cerified Coin Market Indicator). I won't trouble you with the details, but the bottom line is that the following services (as of 5 Sep 2006) are rated on their sight-unseen bid levels (as gepared to the sight-seen bid). They update this weekly, so it is probably in your interest to check it out...

PCGS: 85.9%
NGC: 78.9%
ANACS: 55.4%
ICG: 80.2%
PCI: 49%
SEGS: 48%
NCI: 38.6%
INS: 28%
Second Tier Grading Services: There are other quality grading services out there that are either too small or too new to make the CDN list. Hallmark and ANI would probably be valid examples. I have many ANI coins...and most look pretty good, but probably have just a bit too high of grade (e.g. I have a PCGS-graded 1886 Morgan Silver Dollar at MS-63 that looks exactly like an ANI graded 1886 Morgan Silver Dollar at MS-65...so in this case the ANI is probably a couple of MS grades too high). I wouldn't avoid these coins, but you certainly don't want to pay the PCGS price or even a good fraction of PCGS list price for these coins. (At higher grades/rarer mints and years, the difference between an MS-65 and MS-63 can be amazing, you don't want to be on the wrong end of that deal). All that said, if you do some research, don't be afraid to buy a second tier graded coin, just don't pay like it is a first tier. [If the service has a web site, visit it and develop your own opinions, if it doesn't have a web site, that should signal alarms! You can also ask the seller what they know about the service, their response should be...informative]
Third Tier Grading Services: These are in-house or fly-by-night services that are, to coin a phrase, geplete rip-offs. These are the rotten apples of the coin industry. They will grade way above any rational value, to include calling obviously circulated coins "Mint State". These are usually not professionals (certainly not in a numismatic sense), and I just can't regemend buying a coin, especially an expensive one, graded/certified through this type of service. Caveat Emptor!
Finally, a word about sellers in general. Feedback scores are important, but not everything. You can still get burned by a seller with excellent feedback (is there a guide on Power Sellers Gone Bad?). Use good judgement. Ask questions. Ask about sellers credentials (e.g. are they a member of the American Numismatic Association? If so, there are inherent protections for you as a buyer. The same holds true if they are a member of the Professional Numismatics Guild.). Most importantly, ask questions about the coins, especially if you have doubts about the geposition or quality of a poorly described lot that is still catching your interest. Not all poorly descibed lots are auctioned with evil intent. Just as not all coins graded by third tier services are a rip-off (I have some beautiful coins where the only "ding" is that they are in a third tier service's slab). But it is still up to you as the bidder to do your homework before you gemit to buy if you want to avoid loss and disappointment! There are some truly super deals to be had on the coin trading "floor" on okay, I just hope I can beat you to them!