The value of a rare coin is highly dependent on the coin's condition or "grade." This is especially true when it comes to top grade coins. Grading has become very precise. In older times a coin's grade was described by one of about seven states, such as Good, Extra Fine, Almost Uncirculated, Uncirculated, etc. Today the grading is even more precise. The previous word grades have been reduced to two letters and are still used, but a number has been added to further define the grade. The number is between 0 and 70 in which 0 is worthless and 70 is an example so perfect it has almost never been seen. For an example, coins never circulated are now called MS (for Mint State) and can run between MS60 and MS70. MS60 coins show no circulation wear, but have lead a rough life. Most coins fresh from the mint are around MS63, very nice and rare ones MS65. MS66, 67, and 68 coins are sometimes found and have great premiums.
The value differences between coins only one grade number apart can be staggering. For example, an 1892O Silver Dollar in MS64 condition is worth $550. The same coin in MS65? $5,820! In MS66? $60,000. And the only difference between any two grades might be a single "bag mark" or nick from another coin.
So can you tell what grade a coin really is, or will you get ripped off? Can you convince a buyer what grade it is when you sell? Yes, you can avoid the high-grade coins -- but they are very pretty if that is your pleasure, the best investments if that's your bag. Thus God beget Third Party Certification Firms. These are not to be confused with a seller of a coin putting his own grade on a coin, issuing his "certification." These are firms who have no financial interest beyond their fee. They inspect the coin, determine its grade, and then seal in into a container or "slab" with a serial number and grade. Here is what one looks like:
The container is ultrasonically sealed air-tight and will show if it is tampered with. It protects the condition of the coin.
There are quite a few independent third-party certification services. Some are know to give higher grades than others -- this makes them more popular amongst sellers wanting their coins graded, but makes coins graded by them worth less money than the same coin in the same grade from another more stringent service. This puts back as much uncertainty into the whole process of determining a coin's value as these services were supposed to take out. One of the best places to help find out a certified coin's value is Teletrade where you can research actually auction selling prices for a coin and for each certification service.
Most services have a guarantee that if they grade a coin too high they will pay you the difference between their grade and the real grade. But this is only if you send the coin to them for regrading, and they decide it was wrong. The ACG (below) does not offer this.
Here are some services and my personal most-opinionated opinion of them. Pricing was accurate as of 11/00:
PCGS - The Professional Coin Grading Service in Newport Beach, CA. This is likely the most respected and most fussy service. Coins certified by them tend to bring much higher bids at auction. A typical certification fee for a pre-1970 coin with 30 day turnaround is $30.
ANACS -- ANACS of Columbus, OH. This used to be the ANA Certification Service, but was sold by them. A typical fee might be $12 per coin.
NGC - Numismatic Guaranty Corporation of America. This is now the official grading service of the ANA. A typical feed might be $15 for a 21 day turnaround.
ICG -- The Independent Coin Grading Co. in Englewood, CO. A typical fee might be $15 for a 21 day turnaround.
AGC
-- ASA Accugrade Corp. in Longwood, FL.
This service is not held in as high a regard by collectors as the above
four are. Teletrade doesn't even handle their coins, just those from
the above four. I have found it best to subtract one or two from
their grade when pricing coins. They have a complicated price structure
that goes as low as $5 per coin.
