You’ve spent
years and a lot of after-tax income assembling your medical collection.
Now, at a certain age or due to unforeseen circumstances (e.g.,
retirement, divorce, tax issues, death, health problems, or a concern
for your collection), you have decided it is time to let go of your
prized possessions. What do you do? How do you go about it? Who do
you contact? Who can you trust?
There are
multiple choices on passing along or selling your collection. Should you
use an auction house or eBay? Donate to a museum? Sell directly to
another collector? Sell to a trusted dealer? The two worst-case
scenarios: You get a divorce and are forced by her attorney to quickly
sell. Or, you die and your family sells everything at a garage
sale! Think I'm kidding? Think again. I have witnessed all of the
aforementioned.
I
have seen multiple large collections go to auction or a forced sale and
fail miserably. In all cases the realized prices for the collections
were telling because they were so low. Why you ask? Here are several
reasons:
1.
The most common reason for low realized prices
is because the seller bought medical antiques in isolation, without
unbiased expert advice, and paid way too much or bought misrepresented
items.
2.
The buyer did not have particularly good taste
or was a ‘gatherer’ rather than a true knowledgeable ‘collector’. In this case, there
is not much anyone can do to help.
3.
The buyer was an inexperienced student of the
topic he collected and was taken advantage of by unscrupulous dealers or
auction houses.
4.
The collection was poorly presented or
inadequately described by an auction house or internet sale, resulting in low bids which
were not allowed to be posted with reserves.
There, we said it. Not everyone is a ‘knowledgeable’ collector/seller
and they generally fail terribly when it comes time to sell.
So, what should
you do? First and foremost… plan ahead. Assume the worst case
scenario and do your homework because we guarantee you, no one else
will do it for you:
1.
Know your topic inside and out. Read, talk,
and know everything there is to know about the topic you collect. Have
a friend, dealer, or paid advisor who will serve as your brains. (If
you have not done this all along, you are a prime candidate for this
article and advice.)
2.
Keep meticulous records of everything you
buy. If you have not done this, get busy and reconstruct the facts.
3.
Research the provenance or history of each and
every piece. You are in luck, Google and Google Books makes this much
easier to accomplish today.
4.
Track the prices, dates, and from whom you
purchased each piece on a spread sheet or ledger book (If you have a
large valuable collection, do it on an Excel or similar spread sheet and
do it right! Keep multiple backups too.) We are able to provide
examples of this system, but a simple system is best.
5.
Tag each item with a number or full name to
relate it to your spreadsheet entries. Use removable stickers or string
tags on the item.
6.
Keep up with sales of similar items at
auctions or on-line and note those sales with dates on your spreadsheet
or ledger. Watch eBay and auction houses that specialize in scientific
and medical antiques. (Or, you can buy auction prices-realized research
on-line.)
7.
Above all, it is your responsibility as
the owner to weed out the junk in your collection before you try to
sell it. You cannot expect to come to the table with a lot of
odds and ends material and a ‘take-it-all-or-leave-it’ attitude.
This is not a flea-market game. If you want to deal with
flea-market buyers, you are in the wrong place. It’s just good
business manners and you have to divide up the collection into
groups before you make connections with major
collectors. High dollar buyers expect to be treated as professionals
and not flea-market dealers. If you miss or avoid this point, you
are going to severely lose your shorts in any auction. Clean out
the closet, get rid of the obvious junk (especially later (post-1900)
material that simply will not sell) and prepare your collection for
'curb appeal' just like you would to sell a home.
8. If your collection contains rare medical
books, papers, or art, you will need specialized advice on listing and
valuation. Do not expect anyone other than a specialized medical dealer or
knowledgeable collector to understand this arcane area of medical
collecting. No dealer or auction house is going to be an authority
on everything, or have a specialist who is familiar with every medical item. Even the largest auction houses
are woefully poor at evaluating medical antiques, and especially at
placing accurate descriptions, much less values.
9. As
more information becomes available, update your spreadsheet
descriptions and the reasons a given item is unique or has unusual
value. File and preserve documentation with links and instructions
about the item or items you are documenting. This takes
serious time and effort. Again, no one but you can or will do
it for your collection. Yes, I can help, but this is the hard part and not
something anyone with a day job is going stop and do for you. Yes,
you can pay a knowledgeable dealer to do this part, but do you really
want to write-off that much of the appreciation in the value of your collection?
10.
Photograph every single thing in your
collection using a planned and consistent technique. Do not
just take random photos, pretend you are going to publish a book and
do a professional job or hire someone to take your photos
accordingly. Photos will be invaluable for a sale or
evaluation in the future, especially if you are in a burial urn.
This is one of the most essential items on this list. It must
be done digitally, not with film prints! I can make recommendations in this area regarding
equipment and technique, but you have to get it done in advance of any
sale.
Now let’s think
about the various options you have to sell your collection since this is
what you really want to know:
1.
Dealers: The bottom-line with dealers is they
have to make a profit and have absolutely no motivation to pay you top
dollar. When you buy you are their best friend. When it comes time to
sell…well, you already know the answer to that one don’t you? Most
dealers do not have the financial ability to make large purchases and
try to ‘cherry pick’ your collection. Unless you are unusually
up-to-date on values, odds are you are not going to know how much your
collection is worth and you will sell too low. Dealers have connections
and buyers you will never know about, but again they have to make a
profit and it’s usually in the 50% or better level. Another problem
with dealers is they want to buy a few high-dollar pieces, sell those
and then come back over and over to ‘pick’ your collection clean of all
the ‘good stuff’. What it amounts to is you financing the sale each
time the dealer returns.
2.
Auction houses: This can be the absolutely
worst method of liquidation possible because of poor listings, lack of
knowledge by the auction house employees about medical items, grouping
of smaller items under one bid for their convenience, low attendance at
the auction, poor timing, low-ball starting prices. And worst, they
charge you a high price and then turn your sale results over to the
IRS. Yes, individual, well-known medical objects, or surgical sets can
do well at a known auction, but large numbers of obscure medical items bring
next to nothing at auction because of lack of knowledgeable
identification and descriptions in the catalog.
3.
eBay: If you have sold on eBay or have a
friend who will do it for you, this is an interesting way to sell
everything in your closet, especially the smaller items, but don’t think it’s easy for rare or
high-dollar esoteric medical items. It is not. Consult anyone who
deals on-line via eBay and they will clue you in on the problems, high costs,
shipping issues, and dealing with PayPal,. There are
multiple dangers of being in the on-line auction business…that is unless they
are asking to sell your collection for you at a commission!
4.
Museum Donation: Yes, you can go this route
and achieve the satisfaction of having your name on a display (which, by
the way, is not guaranteed by the museum) or getting a write-off for IRS
purposes. In case you didn’t know, most museums do not carefully store
your gifts and may sell them if they need to raise cash to make another
purchase. Smaller, specialized museums frequently go out of business and
sell everything in the museum. They always want for you to ‘donate’
your collection, not ‘buy’ your collection. All you get is a letter to
document you made the donation. If you have the right tax situation and
capital gains
income this option can work. If you don’t, you end up with a nice
letter you cannot use to pay your taxes, CPA, attorney, or for when you
need that angioplasty.
The Art and Collectibles
Capital Gains Tax Treatment Parity Act (S. 374) sponsored by Senator
Pete Domenici (R-NM) and Charles Schumer (D-NY) would "provide
the same capital gains treatment for art and collectibles as for
other investment property." Currently (2009) the capital gains tax rate
for art and collectibles is 28%, compared to 15% for other types
of investments.
Details about Fair Market Value determination for historical
collections and the IRS
5.
Selling to another collector: This can be one
of the quickest and most satisfying methods to pass on your collection.
You most likely will know the buyer, you can dictate the price, and odds
are it’s going to be a private sale with you and your CPA controlling
the terms and taxes. The best part: it is quick money all at once or
made in structured payments without commissions going to auction houses
and dealers. Individual collector-to-collector sales are about trust
and preservation, not a middleman taking a cut of the proceeds.
Still have doubts: see
this article published in Business-Week on collecting
Michael
Echols
Ft. Myers,
Florida
Contact for:
Dr. Michael
Echols
