Gold: 7 Things to Know Before You Sell

Aug. 16, 2011 -- Selling gold never has been easier--or riskier. With prices of the precious metal hitting records almost daily ($1,774 the ounce, as of today), and with fear and uncertainty continuing to roil the world's financial markets, gold buyers are eager to pay top dollar for any jewelry, coins or bars you care to part with.

Never have there been so many choices on where and how to sell. In Texas, you can pick up a nice steak for dinner and unload your tiara at the same time: Gold and Silver Buyers, the state's biggest buyer of precious metals, has its stores conveniently located inside or alongside supermarkets.

Since May, eBay has been offering a new feature on its site--a Bullion Center. Spokesperson Johnna Hoff says it was created "to be a one-stop destination" consolidating trade in all types of bullion--gold and silver coins and bars, primarily. The terms and conditions that apply to the sale of a gold bar are no more onerous those that apply to somebody who sells a toaster, a football jersey, or anything else on eBay: Small, casual sellers (non-professionals) pay eBay 9 percent of the price for which their bullion sells, when and if it does. There's no charge for listing. Small sellers, says Hoff, accounted for about one-third of bullion sold last week on eBay.

Whether you sell your gold online, at a local jeweler or through a pawn shop, it's possible, if you're not careful, to wind up with less than its full value. To avoid getting taken, keep these 7 points in mind:

Shop Around. No matter how or where you ultimately chose to sell, start locally. Take your gold to a reputable local jeweler or pawn shop and ask them to estimate its value. That way, you'll have at least have a base price in hand before you solicit online bids or other offers. You don't need to worry that you're abusing the good nature of your local businesses, says Dave Crume, past president of the National Pawnbrokers Association and vice president of Wichita, Kansas, pawnbroker A-OK Enterprises. They're in business to give estimates, and they'll give them for free. "Go to three or four stores," he advises, "and compare." To locate your nearest pawnbroker, try the National Pawnbrokers Association website.

Beware 'Rogue' Buyers. Crume cautions sellers about doing business with transient gold dealers whom he calls "rogue" buyers (also known as "hotel" or "pop-up" buyers). They blow into town, run ads promising high prices, and set up shop, say, in a hotel ballroom. After vacuuming up a city's worth of jewelry and coins, they disappear, sometimes leaving their victims un- or underpaid. In one test, a gold chain legitimately appraised at $250 was offered to a variety of hotel buyers. None offered more than $130. Before you sell gold--whether to a hotel buyer or to anybody else--check with the Better Business Bureau to see if there are complaints against the buyer.