Inside Auctions: Great for Buyers, Sellers beware!

Fees and the Dummy
Auction Prices - Less than Retail
Moving Volume and Talking Fast
  Email page to a friend

Fees and the Dummy

Are you downsizing? Do you have the unfortunate task of handling an estate? Do you want to get top dollar for your collectibles? Just call an auction house so they can get the money for your items and get rid of all that unwanted stuff. Sounds easy, right? Wrong!

Before making that call to the local auction house, learn how auctions work. After the media finally exposed indictments, unethical practices, and even the price fixing between big auction houses like Christie's and Sotheby's in the early 2000s, many people decided to learn more about the auction process. But, do those auction TV shows really show you the inside scoop on auctions? 

Sure, those shows will show you how the auctioneer talks fast, but will they show you the auction dummy (the person hired by the auction house to bid against you), the buyer's premium, or the price you'll pay for insurance and storage fees of your items before an auction takes place?

Auction Prices - Less than Retail

Also, people who buy items at auction are buying them at wholesale prices because auctions are typically selling to the trade, to dealers who will then increase their asking price for the item to the retail market. This can be great for the buyers at auction and the members of the antiques trade, but if you are the seller, you can be losing up to 50% of your item's value. Auction houses will usually take a percentage of the sale from both the seller and the buyer, so you end up getting a lot less than the value of most items!

Moving Volume and Talking Fast

You also have to hope that the auction house has properly advertised your auction broadly enough to attract interested and high paying buyers. You want the real collectors who are willing to pay top dollar in the auction room bidding on that old salt & pepper shaker set, that floral still life painting, or grandma's piano blanket. 

It is quite a task for even the most respectable auctioneer to get the biggest and most interested group of buyers from every collecting group to your auction! Before selling your items at auction, know their values! Have them appraised by an independent third party who has no interest in buying them and has no connection with the auction house. 

Remember, auctioneers tend to work in volume, so they are interested in moving a lot of items as quickly as possible to make their money. They are not going to spend that much time trying to get top dollar for every piece--Good for Buyers, but not if you are selling your family heirlooms.

Many times they are not aware or have taken the time to recognize the valuable antiques in the estate--this is often times stated in the auction houses' contracts too. Those of you who have brought items to my programs that were purchased at auctions in a box lot have been pleasantly surprised to learn that the auction house left a very valuable item go for only $5, $10, or $25! It's great unless you are the one selling the box. 

Dr. Lori
Director
Masterpiece Technologies Inc.