This is the second part of a two-part series on buying and selling at auction for beginners. In this article, I’ll provide some guidelines for choosing an auction house.
Pros and Cons. Selling at auction can be a great way to sell an estate or collection quickly and efficiently. A well-organized auction can attract a lot of buyers and can turn the entire contents of a house or collection into cash with a day or two of sales. If the auction include items that are, rare, valuable, or have interesting provenance (history of use or ownership), then it’s possible to exceed the original estimates if a bidding war breaks out.
On the downside, most items sold at auction are sold “without reserve”, meaning there is no minimum sales price established for an item and it may sell for much less than you wanted. Larger auction houses may be willing to set a reserve if an item qualifies for one of their specialized quarterly or semi-annual sales, but that means that you may be waiting several months or longer for your item to be listed for sale (and even then, there are no guarantees that it will sell).
Understand the fees. Auctions are essentially a form of consignment, but the fees they charge may not always be fully understood by the consignor (seller). An auction house receives a sales commission (percentage) based on the final bidding price of an item. The consignor’s commission rates can vary widely, anywhere from 0% to 40%, and often depend on the value of the item(s) being sold. A second commission called a buyer’s premium is charged separately to the buyer. This fee may be anywhere from 10% to 25%, depending on the auction house and the bidding method utilized.
Additionally, fees may be charged for services such as pick-up, advertising, appraisals, or even if an item fails to sell. Generally, the more valuable an item or an estate may be, the better chance you may have in negotiating a better commission or reduction of certain fees.
Reputation. An important consideration when deciding on an auction house is their reputation. Is the staff friendly and knowledgeable? Do they specialize in a particular type of item, and if so, how have their past sales been? Are there any reviews / testimonials available from past consignors online or in person? It certainly never hurts to do your homework in this area to ensure that your expectations will be met.
Presentation. In sales, presentation is everything. Auctions are no different, and top auctioneers know that. Before the sale, what sort of preview does the auction house provide? Are there photos and descriptions of the items available online, and if so, are they of good quality? Does the auction house only sell locally, or do they accept phone and online bidding as well? How are items presented when they are being sold?
If at all possible, try to attend a live sale before choosing an auction house. You’ll get true sense of the staff, their clientele, as well as how things run. Ideally, a sale should run like a well-oiled machine, with knowledgeable, friendly employees available to address any questions or concerns. Choose anything less and you’re selling yourself short.