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February 23, 2010 |
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Wealthy Seek Cash Through Auctions |
(Dow Jones) Long used for estate sales, wealthy individuals are turning to auctions to sell jewelry, antiques and other valuables.
Some need the cash for tuition and other expenses, others
think that high gold prices make now the right time to sell grandma's
seldom-used jewelry, but Baltimore financial advisor Tim Maurer warns
that unless it's a necessity, don't sell items if prices are depressed.
"If someone really needs the money, that may be their only
course of action," he says. "But people should not increase liquidity
just for the sake of liquidity."
Many people have no choice.
"They tell us that their stock portfolios and their
investments are worthless, and they need cash," says Leslie Hindman,
president and chief executive of Leslie Hindman Auctioneers in Chicago.
"Some have lost their jobs or they are afraid they'll lose their jobs."
Individuals also think this is the right time to sell. The
demand for gold, Asian art and certain types of jewelry remains strong
despite the recession because there's a worldwide market, and these
types of items are easy to transport.
"When people see jewelry prices, gold prices, what coin
currencies are being sold at, they are inclined to look at their safe
deposit [boxes]," says Kathy Doyle, chairman and CEO of Doyle New York,
Auctioneers & Appraisers. "I think people are strongly reassessing
their collections, and if they have other needs."
When clients asked if they should sell old jewelry to reduce
debt, Christopher P. Van Slyke, a financial planner in La Jolla,
Calif., gave them the green light because the value of their gold had
tripled.
"Don't sell it if it's your grandmother's jewelry and you
need it to remember her, but if you don't, it's a piece of metal," he
says.
Maurer warns clients to consider the financial and emotional
value of an object before deciding to sell. One family needed cash
after a home sold for less than expected but decided not to sell their
antiques because prices were depressed.
Doyle says people should never sell without first getting an
accurate appraisal. Auction houses typically offer the service for
free.
Before selling, a person needs to negotiate with the auction
firm about fees, insurance and other details including the design of
the sale. Some people prefer to sell items directly to the auction
house, others consign the property to auction and wait for the payment
after a successful sale.
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