Poll: At what price would you buy 3rd party graded

News: Welcome to the Canadian Paper Money Forum.

At what price would you feel most comfortable buying 3rd party graded (PMG) notes.

Would you:
a) Would never buy a PMG graded note
b) As a last resort/need that note
c) Would like PMG graded at a minimum of $xxx per note
d) Definately must be PMG graded when spending $xxx per note

PMG is only used as an example here. Substitute your favourite grading service. This question has more to do with spending comfort level.
Keep scarce or rare notes from your decision if that helps. Pick a note in your head where this question would make you think.

I would feel more comfortable with a graded note when spending a minimum of $500/note.
I would probably require PMG grading at $1000+ /note

I don't personally like certified notes although I accept that they're here to stay. Many certified notes have been obviously washed, pressed and/or trimmed yet no explicit mention of this is ever made on the certification holders. I've seen certified notes that have been severely trimmed yet still carry "EPQ" ratings and the like. They are on eBay all the time.

Another worry I have is that the American certification companies are probably a lot less familiar with the paper fabrics used for Canadian notes than for American notes. American paper fabrics have their own unique characteristics that are distinctly different from Canadian paper fabrics. I always find it more difficult to grade American notes than Canadian notes because of this fact (I have handled far fewer American notes than Canadian notes). Conversely, and this is only a personal opinion, one would expect the American certification services to have more trouble with Canadian and world notes than with American notes. It all comes down to a matter of familiarity with the material under investigation.

There really is no substitute for learning how to grade oneself although it can take many many years to become an "expert" in sniffing out the tell-tale signs of washing, pressing, ironing, trimming, cleaning, pinhole repairing, tear repairing, etc. In fact, I would encourage everyone who is interested in grading to take some common notes from circulation and to wash them, press them, iron them and trim them and then perform some "before and after" tests in order to learn what the characteristics of processed notes are.  Please, please don't do this on rare and collectible notes though!

The problem as I see it is not that people have trouble grading themselves but that the Canadian grading standards are too restrictive at the upper end, i.e., a Canadian "UNC" is defined to be a 100% perfect and original note with no visible blemishes whatsoever. This may be realistic for current and recent issues which are available in untouched bricks but it is certainly not realistic on pre-1954 notes. Dealers and collectors are now beginning to realize how very rare Bank of Canada 1937 notes are in original 100% UNC condition without any semblance of a counting crease. In my humble opinion, an additional grade of "100% Flawless Original Unc" (NOT "100% Flawless Pressed Unc") should be introduced into the catalogues for all 1954 and earlier notes.

I would certainly buy a certified note if I agreed with the grading but I wouldn't want to pay more than $20-30 extra for the privilege, i.e., the cost of the certification process. I would be very reluctant to buy an expensive certified note "blind", i.e, without inspecting it first. Too many certified notes have been processed in one way or another (washing, pressing, trimming, etc.) and these "problems" are never explicitly mentioned on the holders.

It seems to me that the seller of a certified note shouldn't charge too much more than the value of the note itself plus the cost of the certification process.

I don't want to be cynical, but I think we're going to see a lot of processed and doctored notes go into "hiding" in certified holders in the future because sellers of certified material can avoid the ethical dilemma associated with having to describe their material as having been processed or doctored. As I see it, it would be best if the certification services refused to certify processed or doctored notes --- but that obviously would not be in their best commercial interests!

Only time will tell whether paper money certification will turn out to be as popular as coin certification. One good thing about slabbing coins is that it prevents one from damaging the coins by fingering them, breathing on them, and carelessly dropping them. I suppose that one could make a similar argument for paper money too!

Ottawa brings up several excellent points which put 3rd party grading of Canadian pre 1954 notes in question.  The factors that would lead me to decline grading (in other words selecting OPTION A) are:
a) the notes have to be sent out to foreign grading services
b) the $XX expense to have each note graded
c) the grading is done by American "experts" who may have little experience with Canadian paper
d) a hidden agenda to overlook processed notes
e) my personal experience with most dealers/collectors is that we end up mutually agreeing on a note's grade

However, I have not witnessed d) and would be surprised if a company has this agenda unless I suppose the dealer supplying the note is a major customer (heavily influencing the grading co. business).

the Canadian grading standards are too restrictive at the upper end, i.e., a Canadian "UNC" is defined to be a 100% perfect and original note with no visible blemishes whatsoever

Perhaps such stringent standards have kept third co. graders at bay in Canada, and the UNC notes rare indeed.  However, I believe these standards are being loosened up somewhat.  As reflected in this year's 1997 Charlton's definition of UNC (pviii):

"Some issues may have ripples (as made)....Premiums may be applied to the more desirable exceptionally centered and strongly embossed notes.  Uncirculated notes of the Canadian journey issue wih the added security features may be expected to show a small indentation where the holograph strip meets the edge of the note. "  

I have seen ripples on many UNC DF's (the majority of UNC BABN 2003 Journey $10)and perhaps the definitions will loosen up for scarcer varieties.

We often forget that certified grading (of both coins and paper money) is a purely North American capitalist phenomenon. Certified grading naturally appeals more to investors and speculators (who are often unknowledgable about or uninterested in what they are buying) than to collectors (to whom condition is often of secondary importance to historical significance and aesthetic appeal).

Certified grading has never caught on in Britain, in the rest of Europe, in Australasia and in Asia, and I doubt if it ever will. By way of example, Spink & Son of London, England (perhaps the most famous of all numismatic companies that was established in 1666) continue to use the traditional grading scales that have served collectors and dealers well for over 100 years, i.e., VF, EF, GEF, and Mint State (FDC) for coins, and VF, EF and Unc for paper money.

Numismatics has traditionally been a "tactile" hobby, i.e., a hobby in which the enjoyment is enhanced through (careful) touching of the material in question. This tactile appreciation is obviously lost as soon as an item has been entombed in a certified plastic holder.

When the asking price of a certified "Unc" note goes up by 50% or more just because there is one light teller's flick rather than two then I think we should all start to worry about what's happening to our hobby!  In my personal opinion, WIDE EVEN MARGINS are infinitely more important than the presence or absence of a light counting flick. After all, a light inconspicuous counting flick is essentially invisible when compared with one or two very narrow margins which will forever stand out like a sore thumb!

Stamp collectors have appreciated the importance of WIDE EVEN MARGINS for many decades and they are willing to pay large premiums for such well-endowed stamps. I personally feel that it's only a matter of time before paper money collectors start to attach more importance to WIDE EVEN MARGINS and less importance to the absence or presence of a trivial counting flick.

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We often forget that certified grading (of both coins and paper money) is a purely North American capitalist phenomenon. Certified grading naturally appeals more to investors (who are often unknowledgable about what they are buying) than to collectors (to whom condition is often of secondary importance to historical significance and aesthetic appeal).  
 
Certified grading has never caught on in Britain, in the rest of Europe, in Australasia and in Asia, and I doubt if it ever will. By way of example, Spink & Son of London, England (perhaps the most famous of all numismatic companies that was established in 1666) continue to use the traditional grading scales that have served collectors and dealers well for over 100 years, i.e., VF, EF, GEF, and Mint State (FDC) for coins, and VF, EF and Unc for paper money.  

With all due respect Ottawa,this is our market,and where we collect,in North America.Certified Grading has caught on in the US,a much larger market than Canada.
In speaking to dealer after dealer,including Don Olmstead,they tell me this will be a reality within 3 years.More dealer stock is turning up graded,for whatever reason.I'm not trying to argue the pros or cons-just state what seems to be reality.
Personally I dislike grading services for my notes,but it's not what i like that counts,it's the market. When the largest buyers  in North America has adopted it do people really believe we can delay this as US buyers seek the same Canadian Notes we are purchasing?

Must say i agree with some of your thoughts,the Wide Margin point is well taken and very true in my opinion,but nevertheless,i think we move to grading systems as the hobby expands.Sort of like the next generation of collectors.

Kinda like the old addage, you can't fight the Fed. You can try but.........

Certified grading naturally appeals more to investors and speculators (who are often unknowledgable about or uninterested in what they are buying) than to collectors (to whom condition is often of secondary importance to historical significance and aesthetic appeal).

BANG ON.  And the speculation is driving up the price.

However, it is coming, so we have to deal with it (sadly).  This does not makeme happy, but at the same time, does not change a darn thing about how I will be collecting. I will never buy a slabbed note, unless itis the only one of it's kind and I desparately need it.  Who knows, I may even remove it from the slab to actually enjoy the note, and not some block of plastic.  

I think buying a graded note is the same as buying a noted not graded by a third party. What it accomplishes in my mind is any grade discussion between the buyer and seller. The grade if predetermined allows for a focused discussion on the transaction price. Of course you are free to disagree with the grade regardless of who grades it. If thats the case you may as well move on.

I have recently bought three graded notes and was pleased with the results. Two were AU58 and one was VF35. I thought the grading was spot on. These were tough notes too get too and I paid 19th edition prices in each case, no premium. I also bought the notes froms scans. I was reasonably confident the grading would be fine.

In principal I like the idea. However I think the price should be more economical. Maybe 20-25 bucks per note. It would be cool to have grading companies come to all the major shows also so you have several chances per year to get notes graded if you choose too. Even at 25 bucks per note I'm sure they could get 100 or more notes to grade over a weekend show.

Which brings up another question I have wanted to pose. I'll start a new thread to carry that one. To cut out or not too cut out.

Who knows, I may even remove it from the slab to actually enjoy the note, and not some block of plastic.  

Hell of an idea! I like to feel,touch,yes,even smell my notes once in a while.Would cutting off the "tag" with the supposed grade keep our notes in the elite category that seems to be coming.

And the speculation is driving up the price

Yep,and housing,stocks,tulips,...demand is really how speculation festers,so the real "culprit" if you will,is demand.

I agree entirely that we cannot fight against certified grading. It's already here and in the not-too-distant future high-grade notes will only be salable at discounted prices if they haven't been certified, at least if they're being sold "sight unseen" on the Internet. It's the same right now with Canadian Unc "Red" Large Cents --- uncertified examples go for far far less on eBay than certified examples do.

Rapid price increases fuelled by speculation are obviously good for those who already have comprehensive collections but not so good for newcomers who are just starting out (wealthy ones excepted).  

Another aspect of certified grading that hasn't been mentioned before is that collectors are usually very "orderly" people who like to store and display their collections in a consistent manner. This is not really possible when each certification company has holders of different shapes, sizes and materials of construction! I can't help wondering how the judges of competitive displays at CNA Conventions are going to handle this matter. I somehow think that displays "in the raw" are going to win out on judgment day.

Perhaps one day we'll see some sort of "zippered" certification holder so that the note can be removed temporarily for display purposes ...  

And one last thing --- how comfortable or uncomfortable would you feel sending a $10,000 note (e.g., an Unc $25 1935 or $1000 1937) through the mail to a certification company outside of Canada ...... ?  :-/

how comfortable or uncomfortable would you feel sending a $10,000 note (e.g., an Unc $25 1935 or $1000 1937) through the mail to a certification company outside of Canada

This is one of my principle complaints with 3rd party grading.... I don't like to let a postal service man-handle my notes!

Although I'd never own a $1000 note (even if its a relatively rare one) I can't imagine sending a high grade $25.00 (or even my 1954 *NS $5.00) outside of Canada.  I just don't feel comfortable doing it and cannot imagine how ceritified grading is going to "sweep" into Canada unless one of the companies sets up shop here (say in TO).  

While I do understand the appeal of having a note graded, I am completely against the idea of it being slabbed.  I've also seen wide mylar sleeve holders which I guess were sealed with a grading on the top portion.  I don't know how these or slabbed notes are stored...but it is really unappealing to me.

I remember a day when I thought "yes certified grading could help establish Canadian paper money as an important hobby, and help settle once and for all debatable grades etc, etc."   Now that I have given the topic more though, seen many other knowledgable collectors' input, I'm dead set against it.  

If it is indeed a phenomenon that's "here to stay" then I do think "Buxvet's" idea of having them visit major shows an excellent idea.   Perhaps it would be worth it  -- to invest in having a few of my more precious notes graded (provided they're not SLABBED) but I will have to be won over by a very convincing grader.

One of the main concerns that weigh on me is sending expensive notes to another country for grading.Never done it and doubt I ever will. Having owned some expensive notes,unique ones too,the thought has tempted me more than once.But alas,the fear has won out-maybe common sense? :-/

My wife has been a large buyer of Graded Notes lately,much to my chagrin,so I have delved into the system somewhat.She has also corresponded with the seller regards the reliability,honesty,integrity ect of one such service.

One cavaet-I do not support slabbing notes.As i stated previously,I like to smell,feel ,touch,and turn my notes around in my fingers.I love purchasing noptes with heavy embossing that you can feel thru your fingertips!

But-That does not mean some services are unethical or dishonest.For example PMG.Since it was mentioned here,I will contain my comments to them specifically.
They have a 3 member grading panel and the graders comments are also fully accessible by quoting the bar code during a quick call to PMG.
To suggest someone would slab a note to hide defects points to unethical practices. PMG has way too much of a reputation and standing in the community.A dealer would want the best PMG grade possible with EPQ so why bother sending doctored,trimmed,washed, torn notes for a higher grade?Waste of money,no? Common sense I'd think.

In the end if someone wants to actually do some due diligence all they need to do is grab the bar code off the back of the holder and get a full report on the note they are buying, I recommend this on higher value notes.Having this discipline is an advanced approach that will serve you and the market well and may reveal potential defects in a piece which were unanticipated by you but fully considered by PMG when they assigned their NET GRADE on the holder.

Some of these thoughts are from the seller my wife has been buying from,and I've used them without his permission.She has also called PMG to verify certain facts,it's easy to do.

Just a few comments to consider-the other side of the coin if you will.

Thanks for the insight Vallarta.

Ottawa also posted recently on the "cutting out graded notes" thread, how EPQ designation does not factor in trimming. However, I assume this occurance would be known thru the barcode.

Like when I learn something new, thanks !   8-)

My pleasure doug62.

Just because a note is slabbed or in a holder the seller is accountable to the client and if any defects exist they must still be disclosed if not a normal occurrence when the note was printed.The buyer  is purchasing the note, not a slab.

I noticed the EPQ designation was mentioned as not being an assurance that said note has not been trimmed.THATS WHY I LOVE THIS FORUM!!!  Learn something NEW all the time-if you're(anyone) willing to learn!
Not aware of this fact,so my wife and I placed another call-will update the forum when an answer is available. The EPQ designation as I understand it indicates paper of the highest quality for the grade, spectacular embossing and completely original paper.

If a lower graded note does not have the EPQ designation  I would like to see them add a symbol or code to all their holders to indicate pinholes, pressing,repaired or whatever defects exist that are not immediately clear or visible.