Auctions

Auctions – Buying at Auctions

16 May 2010

I have always wanted to write a series of articles on the benefits and possible pitfalls of buying and selling at auction. Auctions can be an exciting learning experience whether you are an antique aficianado or just looking to furnish your home.

Let’s call this first installment “Buying at auction”. Here are a few pointers that may help:

  • Most auctions sell items “as is, where is”. Be sure to examine any item you are interested in BEFORE you buy. Once the hammer falls, it belongs to you. The only recourse you may have is if the item is grossly misrepresented. Don’t take that chance.
  • Auctioneers usually disclose at the start of the auction announcements concerning buyer’s premium, payment methods accepted, etc. These announcements override anything that my be in the printed information you have, so pay attention.
  • If you are considering a major purchase and do not feel qualified to authenticate the item, it would be advisable to hire an expert to check it out first.
  • If the item is going to need restoration and you are going to have to hire someone to do it, get an estimate from them first.
  • Set a limit on the amount you are willing to spend. It is too easy to get caught up in ‘auction fever’ and overpay. I see this at every auction I attend.
  • Attend a few auctions and just ‘watch’. You can learn more from observing the crowd than anyone can teach you. Watch and listen to old-timers, they have a better feel for what is going on at the particular auction you are attending.
  • And finally, most auction houses charge a buyers premium. This is a percent of the selling price added to the amount you won the item for. For example, if the auction house charges 10% buyers premium, and you winning bid was $100, your final cost would be $110 ($100 bid plus $10 buyer’s premium). Don’t forget that sales tax is usually added to this.

I am planning on adding a calendar to our website antiquesupply.com showing all local auctions. In the meantime, you can go to auctionzip.com , enter you ZIP and the distance you are willing to travel. You can see all the auctions in the area and they each have details, contact information and usually photos.

Auctions – Selling at Auctions

16 May 2010

In this article, we will cover some of the things to be aware of when selling at auction.

We have many auctions here in the Atlanta area, ranging from small weekly auctions selling everything from yard sale quality merchandise up to large formal auctions selling items up to $100,000 plus.

If you have items you would like to sell at auction, be aware of the following:

  • The auction house will charge you a percentage of the selling price, called the “commission”. It can range from 10% to as high as 25%.
  • Most auction houses will allow you to place a “reserve” on your items. This is the price below which the auction house will not sell your item. Be aware that some auction houses will charge you a commission on items which do not meet the reserve. Be sure to discuss this with the auction house in advance.
  • If you have a number of low value items, the auction house may put several related, and sometimes unrelated, items together in what is referred to as a lot (or box lot). This is done when the items would not sell on their own or for so little that it would not be beneficial to do so.
  • The auction must provide you with a consignment form showing the items you have consigned for sell.
  • After the auction, you should receive payment from the auction house with a settlement sheet showing items sold. The time it takes to receive your payment may vary from the same night to up to a few weeks. Discuss this with the auction house before consigning your items to them.
  • When you think you have decided which auction house to use, attend a few of their auctions to see the prices they get for similar items. You can ask them what they think you would get for your items, but it is an auction and there are no guarantees.
  • If you consign your items to an auction house that advertises their auction as an “absolute” auction, be aware you cannot set a reserve prices. “Absolute auction” means there cannot be a reserve, a seller cannot bid on their own merchandise, and the item must sell for whatever price it brings, regardless how much or how little.
  • The auctioneer’s first loyalty is to you, their customer, not to the seller. A good auctioneer will work hard to get you (and them) the most money for your items.

I will be covering some of the tricks pulled by less honest auctions in the next article. It is unfortunate, but they occur far too often and I will give you some things to look out for so you don’t get taken, whether you are buying or selling.

You can see all the auctions in the area at auctionzip.com. Contact them for their selling terms. .

Auctions – Buyer Beware!

16 May 2010

In the first two installments we covered some basics of buying and selling at auctions. I now must touch on some of the tricks and scams pulled at auctions.

  • House Numbers – Before you bid, look around. Some auction houses use what are called ‘house’ numbers. These are numbers the auction house has reserved to use to bump up the bidding. If you hear the same bidder number winning over and over, and you cannot associate it with a real person holding that number, the house may be bumping the bids and got stuck with the item.
  • “PFA” (Pluck from air) or “OTW” (Off the wall) – These are both terms for the same thing. Some auctioneers will make up bids that do not actually exist in order to raise the selling price. Be observant and look where the auctioneer is looking when he is taking a bid from the audience. If you repeatedly fail to see a live person bidding, you may be witnessing this trick.
  • Left bids (or Commission bids) – A true left bid gives buyers the opportunity to leave a list of items they wish to bid on and the maximum they are willing to pay. The auctioneer will bid for them as if they were there. The ethical method of doing this is for the auctioneer to open with a reasonable bid using the left bid if necessary. They should NOT open the bidding using the maximum bid left by the bidder. If you leave bids for items when you cannot attend, and they seem to always be close to, or at, the amount of your maximum bid, you are not being treated honestly. If you are outbid by a left bid, an honest auction house should allow you to see that it is a legitimate left bid. If they won’t, I’d suspect they were bumping the bid, got stuck with it, and they don’t want you to catch them.
  • Shills (or Plants) – A common trick that some auction houses play is to put someone in the audience to bump the bids. This can be an employee or some even allow the consignor (the one who put the item in the auction) to bid on their own items. This is both unethical, and in some places illegal, but is widespread.
  • False reserve – A reserve (the lowest price that an item can be sold for) is an honest procedure in auction. However, some auction houses use it to not sell an item if they aren’t getting enough for it. A good auction house will Annice that there is a reserve on an item before the bidding begins, not use it as an excuse not to sell an item when it doesn’t bring what they want. It is fine for the auctioneer to not sell an item if he/she feels it is going too cheaply (unless the auction is advertised as an ‘absolute’ auction, but it is not okay to use the ‘failed to meet reserve’ as an excuse.

These are but a few of the ways unscrupulous auction houses operate. If you attend a couple of auctions before you buy, you’ll be able to see if the auction is honest or is trying to pull something.