What are experiences on finding collectors/dealers willing to "downgrade" cards?

[Smarti5051]

For those that have specific collecting goals and finite amounts of money to work with to meet those goals, what are your experiences "upgrading" your cards in your collection (or more specifically, what have experiences been looking for others willing to downgrade)?

To put the question is context, one of my goals is to get a PSA copy of 200 specific vintage HOFers. Some of the specific cards on my list are so far out of reach now, I have just called off the hunt until the kids get through college. For others though, it is a trade-off of quality vs time. I can get a VERY reasonably priced PSA 1 1934 Dizzy Dean Goudey. Right now, it is tempting to add one to my collection. But, as time passes and my collection expands, I will look back at the poor, tortured Dizzy card and think it would be nice to have a decent PSA 4ish version of the same card. Assuming cards continue to appreciate in the future, I could sell my PSA 1 Dean, pay taxes on the gain, and then start the hunt for a PSA 4 with some of the proceeds as seed money (the downside being the tax hit to have to liquidate the card). Or, I can try and find somebody on the boards or a show that has a better copy of the same card that is willing to accept a downgrade with the appropriate cash compensation to even out the value of the trade.

At base, my question is what others' experiences have been finding that willing partner to "trade down" when they wanted to "trade up" with cash (or additional cards). It seems like many of the trade posts I see (although less on this board) are folks with 100 shiny cards offering to "trade up" to a more expensive card. In my mind, I always think, "yeah, everybody wants to trade up." But, is that true? I have only been back in the hobby for about a year after a long hiatus (the last time I was this immersed in the hobby, hearing the word "ebay" meant you missed the beginning of the body of water the speaker was referring to). So, I am not really sure what the common practices are these days on trading.

In short, am I better served being super patient to save up for the exact quality I want on a card, or will I be able to scratch my immediate itch to build my collection without really hindering my flexibility to get the final collection that I want down the road?

[bnorth]

I have been on both ends of that type of trade many times. As long as the person with the multiple cards/card(s) cash know they need to "pay" a premium for the upgrade the trade will usually work out.

[doug.goodman]

1 - we all have finite funds.

2 - maybe buy raw and later pay somebody for their opinion, unless of course it's the slab that you are actually collecting.

3 - tax hit? ok, I guess.

4 - you are thinking WAY too much, if you only like cards of a certain quality, then only buy cards of that quality, if you can't afford cards of that quality, then you need to get realistic about what you like.

There is nothing wrong with preferring the real Mona Lisa to a print, but if you want to see it in your living room every day, you're going to have to settle.

Doug "just saying" Goodman

[joshleon]

I don't have specific experiences in trading up or down but your post made me think about one specific problem with your proposed approach (this is something I think a lot about lately as well): Basically, that card appreciation is non linear by grade.

The PSA 7 and PSA 1 versions of X card don't go up at the same rate. So...by purchasing the 1 now, you aren't in lockstep with that PSA4-7 in someone else's possession. The amount of money you will need to bridge that gap in the future will seem even more insurmountable.

I don't have any data handy to back this up, and I don't think this applies as much to pre war cards. So...grain of salt.

[scotgreb]

While my HOF collection is complete, I upgrade and downgrade all the time -- keeps things interesting. Usually for a different issue but sometimes the same. Pretty much every time, I buy the replacement -- then sell the card I'm replacing. I don't believe I could stand a "hole" in my collection after building it for so long. With respect to trades (in general), I've never had much success. Layering the need for it to be the same player / card seems close to impossible (IMO).
Scott

[bobblesandballcards]

I buy the most affordable copy of a card that has a look that I can be happy with, I kinda like to say the "display quality" of the card rather than even the eye appeal. If I can put it on display and enjoy it at a viewing distance, then it fits my collecting style...the number (or in a lot of cases with mine the letter A) don't matter to me, all the slab does is protect and help pretty up the display and it gives the card authentication for me...I buy with a price in mind not a grade.

[Smarti5051]

I think the situation has derailed a bit by the idea that I am chasing a case or I need to readjust my collecting goals if I cannot afford the condition I want. I am not a slave to the grade. I have one PSA 10 in my collection, and that is a Kobe card I pulled from a pack 25 years ago that I included with a bunch of similar cards from the same era last year. I intentionally exclude considering PSA 10 from my searches because I don't value the premium for the "perfect" card that looks to my old eyes like a run-of-the-mill PSA 8-9.

With regards to my specific collecting goals, I have chosen the "Top 200 Sportscards of All Time" on the PSA Set Registry. When I die, my goal is to have all 200 displayed in 4 x 50-count wall displays. To be clear, these cases will not be filled with PSA 7-9 vintage cards. If I die with an average above PSA 4, it will be a major accomplishment. I could make my life easier if I ignored the registry, but I don't trust myself to not get duped buying a raw card, and since I am displaying them, having them all in the same TPG holder helps the OCD.

In my quest for the Top 200, I am closer to the starting line than the finish line. When I started, it was "centered PSA 4 or better." However, the crazy market now has me looking at centered PSA 1s where the player's image is somewhat visible. It is alot easier to stomach a $300-500 PSA 1 than drop $2500-5000 for a PSA 4-5 right now and allow me to make some progress towards my goal.

Even with the enjoyment a "poor" condition card may give me in the short term, it would be nice to know an avenue exists in the future to potentially trade up to a more eye appealing version of the same card if my circumstances allow it.

Someone above scoffed at the idea of taxes being a consideration to avoid selling vs trading. I am not sure why. Just by way of example, my wife bought me a centered PSA 5 1933 Goudey Ruth #144 (my original dream card) when my daughter was born almost 17 years ago. I believe the cost was $2500. Hypothetically (truly hypothetical because this specific card will be in my collection until death), if I saw a beautiful "better" Ruth for $100,000 that I wanted to replace it with, I would sell my PSA 5 for let's just say $50,000. Then, I could use the proceeds to buy the $100,000 version. Well, in that scenario, I sell for $50,000 and immediately have a taxable gain of at least $48,000 (assuming my accountant feels comfortable we could defend the cost basis without any documentation). Even at 28% federal + 11% state income tax, that is close to $20,000 in tax liability from one sale. That means, I "net" $30,000 and pull $70,000 out of my savings to acquire the Ruth. By contrast, if (as I inquired) it was somewhat commonplace to offer a combination of downgrade + cash to improve the same PC card, I would have the new card in collection and $20,000 more in the bank - and the seller would be content receiving the same consideration. The only loser would be Uncle Sam and California, but they have plenty of wins against me over the years.

I am sorry my original question triggered so many ancillary concerns, but at base I was just curious if collectors/dealers were generally receptive to trade+cash requests to upgrade condition (regardless of whether the card is graded).

[Tyruscobb]

Right now is a great time to buy newly graded SGC vintage cards. SGC has started hammering cards.

I recently purchased a newly graded SGC 4.5 that was cracked from a BVG 6.5 case. A year ago, SGC would've graded this card at least a 5.5, and probably a 6.0. It is a nice card.

However, because SGC has recently tightened its grading standards, I was able to purchase a great card based on a 4.5 grade.

There is some great looking low grade vintage out there. You just have to have an eye and patience.

[Dead-Ball-Hitter]

Originally Posted by Tyruscobb

Right now is a great time to buy newly graded SGC vintage cards. SGC has started hammering cards.

I recently purchased a newly graded SGC 4.5 that was cracked from a BVG 6.5 case. A year ago, SGC would've graded this card at least a 5.5, and probably a 6.0. It is a nice card.

However, because SGC has recently tightened its grading standards, I was able to purchase a great card based on a 4.5 grade.

There is some great looking low grade vintage out there. You just have to have an eye and patience.

+1 I have the same opinion... love the SGC tuxedos. Of course, it sounds like the OP wants to fill out a PSA set registry, so he'll have to pay a little more for the PSA label. To each, their own...

[Smarti5051]

I know that my project would be alot cheaper (or higher quality for the same price) if I started with SGC, but my problem is that I am 25% of the way through my project and they are all in PSA cases. I used to have my display cases with a mixture of PSA/SGC and it was just visually unappealing to me. Crazy as it sounds, these cards are like little works of art to me. So, having they displayed in uniform cases is part of the visual appeal.

[Eric72]

Originally Posted by Smarti5051

...Hypothetically (truly hypothetical because this specific card will be in my collection until death), if I saw a beautiful "better" Ruth for $100,000 that I wanted to replace it with, I would sell my PSA 5 for let's just say $50,000. Then, I could use the proceeds to buy the $100,000 version. Well, in that scenario, I sell for $50,000 and immediately have a taxable gain of at least $48,000 (assuming my accountant feels comfortable we could defend the cost basis without any documentation). Even at 28% federal + 11% state income tax, that is close to $20,000 in tax liability from one sale. That means, I "net" $30,000 and pull $70,000 out of my savings to acquire the Ruth. By contrast, if (as I inquired) it was somewhat commonplace to offer a combination of downgrade + cash to improve the same PC card, I would have the new card in collection and $20,000 more in the bank...

If I'm not mistaken, the trade would also qualify as a taxable event.

(paging BobC)

[Vegas Cards]

I upgraded my 1973 Clemente with someone here on BST a while back. I forget why he wanted to downgrade, but I sent him my PSA 6 and cash for his PSA 8.

Not a high-dollar transaction, but all went smoothly in my view.

I think if you put an offer out there, you'll find people that are receptive.

[doug.goodman]

Originally Posted by Smarti5051

I know that my project would be alot cheaper (or higher quality for the same price) if I started with SGC.

Or raw, which would avoid a good percentage of your cost being for an opinion.

[doug.goodman]

Originally Posted by Smarti5051

... at base I was just curious if collectors/dealers were generally receptive to trade+cash requests to upgrade condition (regardless of whether the card is graded).

Collectors/dealers are receptive to anything that they consider beneficial to themselves, or at least that they consider to be "break even".

[BobC]

Originally Posted by Eric72

If I'm not mistaken, the trade would also qualify as a taxable event.

(paging BobC)

Thanks for the introduction Eric.

Smart5051, Eric is absolutely right. (In other words he's been listening to me! LOL) The IRS views a trade or barter of goods the same as a sale of goods for cash, they're all considered taxable transactions. You may have been thinking about the old Section 1031 of the Internal Revenue Code, and transactions known as Like-Kind Exchanges. You used to be able to defer paying taxes on such Like-Kind Exchanges for pretty much anything, as long as the items being traded truly were of a like-kind. However, the Republican's 2017 Tax Cuts and Jobs Act cut back on what assets can qualify for the tax-free exchange treatment. Since 2018, the only assets you can exchange and defer the tax on are for Like-Kind Exchanges of real property (ie: land and buildings), and that is it. When you trade cards with someone, you are technically selling your card(s) for whatever the then current FMV is of the card(s) you receive in return, plus any cash they may be paying you as well. The trick is to somehow determine and then document what the then current fair market value is of each party's cards that are included in the trade, so each party knows what to report as having technically sold their card(s) for, and to also back their numbers up if the IRS ever comes knocking and asking questions.

And by the way, if you still could do a Like-Kind Exchange of cards today so you didn't have to currently pay taxes on the trade, that wouldn't work and be the case for any cash you also received as part of that trade. When you include something other than just the like-kind properties as part of a Like-Kind Exchange, like cash you may receive to equalize your trade, that other property or cash is called "boot". And in a qualified Like-Kind Exchange, you would have to currently recognize, report and pay taxes on any gain/profit you got from the trade to the extent of "boot" received. So even if a tax deferred Like-Kind Exchange of cards were still allowed, the cash you received could still cause current taxes to be due.

That is all of course assuming you and the party you're trading with bother to report such trading activities on your tax returns to begin with. Good luck!

[familytoad]

Originally Posted by Smarti5051

I think the situation has derailed a bit by the idea that I am chasing a case or I need to readjust my collecting goals if I cannot afford the condition I want. I am not a slave to the grade. I have one PSA 10 in my collection, and that is a Kobe card I pulled from a pack 25 years ago that I included with a bunch of similar cards from the same era last year. I intentionally exclude considering PSA 10 from my searches because I don't value the premium for the "perfect" card that looks to my old eyes like a run-of-the-mill PSA 8-9.

With regards to my specific collecting goals, I have chosen the "Top 200 Sportscards of All Time" on the PSA Set Registry. When I die, my goal is to have all 200 displayed in 4 x 50-count wall displays. To be clear, these cases will not be filled with PSA 7-9 vintage cards. If I die with an average above PSA 4, it will be a major accomplishment. I could make my life easier if I ignored the registry, but I don't trust myself to not get duped buying a raw card, and since I am displaying them, having them all in the same TPG holder helps the OCD.

In my quest for the Top 200, I am closer to the starting line than the finish line. When I started, it was "centered PSA 4 or better." However, the crazy market now has me looking at centered PSA 1s where the player's image is somewhat visible. It is alot easier to stomach a $300-500 PSA 1 than drop $2500-5000 for a PSA 4-5 right now and allow me to make some progress towards my goal.

Even with the enjoyment a "poor" condition card may give me in the short term, it would be nice to know an avenue exists in the future to potentially trade up to a more eye appealing version of the same card if my circumstances allow it.

Someone above scoffed at the idea of taxes being a consideration to avoid selling vs trading. I am not sure why. Just by way of example, my wife bought me a centered PSA 5 1933 Goudey Ruth #144 (my original dream card) when my daughter was born almost 17 years ago. I believe the cost was $2500. Hypothetically (truly hypothetical because this specific card will be in my collection until death), if I saw a beautiful "better" Ruth for $100,000 that I wanted to replace it with, I would sell my PSA 5 for let's just say $50,000. Then, I could use the proceeds to buy the $100,000 version. Well, in that scenario, I sell for $50,000 and immediately have a taxable gain of at least $48,000 (assuming my accountant feels comfortable we could defend the cost basis without any documentation). Even at 28% federal + 11% state income tax, that is close to $20,000 in tax liability from one sale. That means, I "net" $30,000 and pull $70,000 out of my savings to acquire the Ruth. By contrast, if (as I inquired) it was somewhat commonplace to offer a combination of downgrade + cash to improve the same PC card, I would have the new card in collection and $20,000 more in the bank - and the seller would be content receiving the same consideration. The only loser would be Uncle Sam and California, but they have plenty of wins against me over the years.

I am sorry my original question triggered so many ancillary concerns, but at base I was just curious if collectors/dealers were generally receptive to trade+cash requests to upgrade condition (regardless of whether the card is graded).

I just think you mentioned death too many times.
Hopefully that is a very long time away for you so that you can achieve your goal, but with lots of life left to enjoy it!

And the key word is to enjoy it. Unfortunately the prices of really great cards that we want to have and enjoy are to the point of a being serious purchase, so I sure hope we are enjoying the gathering of our collections along the way. If you never reach the 200 card goal, please enjoy the increments. 100 great cards is great too!

For those who are gathering only to make more money on them, we’re in different places. Sure, I’m glad I could sell my cards for at least what I paid for them and probably much more. But then I wouldn’t have the cards to enjoy.

[familytoad]

I forgot to say…I enjoy lower grade cards. PSA 10 no, but the old SGC 10 is great for me!

[brianp-beme]

Originally Posted by BobC

The IRS views a trade or barter of goods the same as a sale of goods for cash, they're all considered taxable transactions. You may have been thinking about the old Section 1031 of the Internal Revenue Code, and transactions known as Like-Kind Exchanges. You used to be able to defer paying taxes on such Like-Kind Exchanges for pretty much anything, as long as the items being traded truly were of a like-kind. However, the Republican's 2017 Tax Cuts and Jobs Act cut back on what assets can qualify for the tax-free exchange treatment. Since 2018, the only assets you can exchange and defer the tax on are for Like-Kind Exchanges of real property (ie: land and buildings), and that is it. When you trade cards with someone, you are technically selling your card(s) for whatever the then current FMV is of the card(s) you receive in return, plus any cash they may be paying you as well. The trick is to somehow determine and then document what the then current fair market value is of each party's cards that are included in the trade, so each party knows what to report as having technically sold their card(s) for, and to also back their numbers up if the IRS ever comes knocking and asking questions.

Just think of what revenue the IRS could have pulled in if this had been in effect in decades past when kids were swapping cards with their friends.

Brian

[BobC]

Originally Posted by familytoad

I forgot to say…I enjoy lower grade cards. PSA 10 no, but the old SGC 10 is great for me!

+1

I'm definitely with you Brian.

And that's actually one of the good things, I think, about collecting pre-war cards. You're not normally going to finds tons of graded 7s-8s-9s out there, if any in those conditions even exist. I'm happy to simply find certain cards in many cases, let alone worry what grade they got.

[BobC]

Originally Posted by brianp-beme

Just think of what revenue the IRS could have pulled in if this had been in effect in decades past when kids were swapping cards with their friends.

Brian

Times (and card values) were a lot different back then. But now you may have guys trading rare backed T206 green Cobbs for '33 Goudey Ruths. The dollar amounts for those cards could definitely be of interest to an IRS agent, whereas they couldn't care less about the cards kids were flipping back in the day.

[Leon]

Originally Posted by Smarti5051

I think the situation has derailed a bit by the idea that I am chasing a case or I need to readjust my collecting goals if I cannot afford the condition I want. I am not a slave to the grade. I have one PSA 10 in my collection, and that is a Kobe card I pulled from a pack 25 years ago that I included with a bunch of similar cards from the same era last year. I intentionally exclude considering PSA 10 from my searches because I don't value the premium for the "perfect" card that looks to my old eyes like a run-of-the-mill PSA 8-9.

With regards to my specific collecting goals, I have chosen the "Top 200 Sportscards of All Time" on the PSA Set Registry. When I die, my goal is to have all 200 displayed in 4 x 50-count wall displays. To be clear, these cases will not be filled with PSA 7-9 vintage cards. If I die with an average above PSA 4, it will be a major accomplishment. I could make my life easier if I ignored the registry, but I don't trust myself to not get duped buying a raw card, and since I am displaying them, having them all in the same TPG holder helps the OCD.

In my quest for the Top 200, I am closer to the starting line than the finish line. When I started, it was "centered PSA 4 or better." However, the crazy market now has me looking at centered PSA 1s where the player's image is somewhat visible. It is alot easier to stomach a $300-500 PSA 1 than drop $2500-5000 for a PSA 4-5 right now and allow me to make some progress towards my goal.

Even with the enjoyment a "poor" condition card may give me in the short term, it would be nice to know an avenue exists in the future to potentially trade up to a more eye appealing version of the same card if my circumstances allow it.

Someone above scoffed at the idea of taxes being a consideration to avoid selling vs trading. I am not sure why. Just by way of example, my wife bought me a centered PSA 5 1933 Goudey Ruth #144 (my original dream card) when my daughter was born almost 17 years ago. I believe the cost was $2500. Hypothetically (truly hypothetical because this specific card will be in my collection until death), if I saw a beautiful "better" Ruth for $100,000 that I wanted to replace it with, I would sell my PSA 5 for let's just say $50,000. Then, I could use the proceeds to buy the $100,000 version. Well, in that scenario, I sell for $50,000 and immediately have a taxable gain of at least $48,000 (assuming my accountant feels comfortable we could defend the cost basis without any documentation). Even at 28% federal + 11% state income tax, that is close to $20,000 in tax liability from one sale. That means, I "net" $30,000 and pull $70,000 out of my savings to acquire the Ruth. By contrast, if (as I inquired) it was somewhat commonplace to offer a combination of downgrade + cash to improve the same PC card, I would have the new card in collection and $20,000 more in the bank - and the seller would be content receiving the same consideration. The only loser would be Uncle Sam and California, but they have plenty of wins against me over the years.

I am sorry my original question triggered so many ancillary concerns, but at base I was just curious if collectors/dealers were generally receptive to trade+cash requests to upgrade condition (regardless of whether the card is graded).

If you die it is not a major accomplishment. Everyone will do it at some point. But if your goal is the grade of 4 or better on your cards then good luck. Cards with better eye appeal can sell for multiples of one in the same grade with less eye appeal. Be careful of buying cards with crappy grades....ie poor eye appeal.

I focus on eye appeal more than a number given by someone most likely less qualified than I am.
I don't think I have traded down but I did consider selling a 7 and keeping a 5 of the same card. But in the end kept both. Just be happy and don't worry so much
.

[bnorth]

Originally Posted by familytoad

I forgot to say…I enjoy lower grade cards. PSA 10 no, but the old SGC 10 is great for me!

+1 Most of my Tobacco cards are beaters and I like it that way.