Iíve seen two different versions of this story. They are very similar and Iíll share both with you.
Bob has a collection for sale and a dealer offered him $1000. Bob thinks the offer is too low. A fellow collector, Jim, comes to Bobís rescue and says that he can sell Bobís collection for $2000, minus 10% for his work in selling it. Of course, Jim doesnít have the money on hand. But Jim is a good friend and wouldnít take advantage of Bob. So Jim takes the collection and promises to pay Bob the $1800 in 30 days.
Jim is a self-proclaimed ďdealerĒ. Jim knows other collectors and shows Bobís collection around. No one is interested in it for $2000. Thirty days goes by and Jim calls up Bob, ďThe sale is going slower than I expected. Iíll have the $1800 to you next month.Ē Disappointed, Bob agrees for the 30 day extension.
Another 30 days goes by with no word. Jim is starting to panic and decides to start selling off parts of the collection to try and come close to the $1800 he owes Bob. Bob calls Jim on the phone, ďAbout that $1800 you owe me.Ē Jim counters, ďThe economy is tough. I need another 30 days.Ē Bob is upset and asks for his collection back because he has lost faith in Jim. However, because some of the collection is already sold, getting the collection back in its entirety is not possible. Did Jim sell $100 worth of stuff or $1000 worth of stuff? Whatís left? Itís a mess now.
In the end, Bob and Jim are no longer friends. Bob got some money out of it, but very likely not the $1800 he was expecting. Bob may not even get the $1000 originally offered by the dealer. Who knows? The entire situation was very stressful and a real mess.
Here is the same story with a slightly different twist.
Two dealers look at Bobís collection. The first dealer offers $1000. The second dealer offers $2000, but doesnít have the money on hand. He gives Bob a post-dated check for $2000.
The second dealer is having trouble selling Bobís collection. Coming up on 30 days, the dealer calls Bob, ďCan you hold on to that check for another 30 days?Ē Guess where this story is going. Yep, itís the same as the first story. The second dealer is having trouble selling Bobís collection and it ends the same way. Maybe Bob gets some money out of the dealer who had the higher offer, maybe not. Maybe Bob gets the unsold part of his collection back, maybe not. If Bob cashes the post-dated check, itís probably going to bounce. Now Bob is stuck trying to sue the dealer to make good on his check.
Whatís the moral of this story? Here is my advice to you.
When you have a collection to sell, money in hand today is better than a promise of a higher dollar figure that is down the road. Whether you sell your collection through a friend or another dealer, payment should be made within 10-15 days under normal situations. In some cases, payment should be made on the spot. (On a side note, auctions are different where the seller typically waits 90-180 days until the auction is held and the auctioneer sends the money due, minus any commission).
If I come to your house and agree to buy your collection, I should be handing you a check when I leave with your collection. Sometimes a personal meeting isnít possible. If you send the collection to me in the mail, I should have a check in your hands within 10-15 days. Or I should be returning the collection to you if we canít agree on an offer.
If someone outbids me on your collection, fine. Thatís business. I canít win them all. But my offer is payment in full today. When the other person promises you payment sometime well into the future, you should immediately see red flags. Iíve seen collectors left bitter by the promise of a higher offer that doesnít come true. Donít let yourself fall into this trap.
Iíve offered to buy collections from people who want to think about my offer for a couple of days. Fair enough. When they get back to me, I sometimes hear things like, ďI spoke to my buddy Jim at the local stamp club and he thinks itís worth more than your offer.Ē OK, but does Jim have a check in hand for you? If not, then Jimís offer isnít a fair offer, in my opinion.
Phantom sales in the future rarely come true. When itís time to sell your collection, I suggest you take the offer of cash in hand today, even if it is for a lower figure. Thatís my best advice to you.