"There were a lot of people who we thought would never sell their coin collections, but they did," explains Halperin. "They used the money to buy up stocks in their own companies at ridiculously low levels. Then they sold the stock back recently, made a big profit and are back buying coins again. They are paying more for the coins now than they got when they sold them, but nothing compared to the money they leveraged from those stocks."
"Few of our clients were as wealthy after 2008 as before, but many people understood that collectibles should hold their value, so they felt confident about continuing to buy," Rohan says. "Others sold their collections and bought real estate or stocks at low prices. Many of the common items for sale went down in price during this time, but the best items usually held their value. Some even increased."
The difference between buying stocks or hedge funds and buying collectibles is that most of the investors, although they care about the value of the items, are passionate about the collectibles themselves.
"Some people will pay almost any amount if it is a once-in-a-lifetime opportunity to buy something they truly want," Halperin said, "but most times, the price is also considered because it is also at least partially an investment."
"We sell what people want, not what they need," adds Rohan. "We want the prices to be fair because if they are not, people will get soured on collecting and quit. At the very least, if someone overpays, we want them to do so knowingly because they really care about the object they are buying and don't want to miss the opportunity to acquire it-never as a result of being misled in any way."
For those entering the collectibles market in any category on the lower end of the price, financing of the purchase is possible. Heritage offers to split payments over a four-month period for a nominal interest rate.
"Those are usually the $50,000 to $250,000 purchases, or less. People buying something for a million dollars usually have the money ready," Halperin says.
Collections offered for sale often come from estates, which is why Heritage has developed a strong back bench of appraisal and legal strength, says Prendergast, who handles this area for the auction.
"You have to be sure the appraiser knows what you need the appraisal for. If it is for tax purposes, you would use fair market value. If it is for insurance, you might want to use a higher valuation because cost to replace it at retail might be higher," he advises.
"We have to warn people involved in estate sales that an item selling at auction may bring more or less than the appraised value at auction. If two heirs each accept paintings appraised at equal value, the paintings may not bring equal value at auction. You never know for sure what is going to happen at auction," Prendergast warns.