Buyer's premium

[Restorer32]

Just received a flyer for an auction of several Packard cars as well as parts and the usual tools to be held in Mass. 15% Buyer's Premium for on site sales and 18% Buyer's Premium for online sales.  Wow! 18%?  Am I out of touch? 10% I understand but 18%?

[alsancle]

Local Auction Houses - Estate sales sometimes have different rules.   All the big houses are still 5 + 10 = 15.

 

Could you post a link to the auction?  Maybe I can swing by if its not too far.

[Restorer32]

Property formerly of Packard Motor Car Services, Inc.  Agawam, Mass. Aaron Posnik Auctioneers

[mike6024]

http://www.posnik.com/html17/112917c/112917c.htm

 

TERMS OF SALE:
25% DEPOSIT AT TIME OF SALE BY CASH, CERTIFIED OR BANK CHECK, OR BANK WIRE TRANSFER. 15% BUYERS PREMIUM APPLIES ON ALL ONSITE PURCHASES. 18% BUYERS PREMIUM APPLIES ON ALL ONLINE PURCHASES. PERSONAL OR COMPANY CHECK ACCEPTED ONLY IF ACCOMPANIED WITH A BANK LETTER GUARANTEEING PAYMENT. EXAMPLE OF BANK LETTER OF GUARANTEE: THIS BANK GUARANTEES PAYMENT TO AARON POSNIK & CO., INC. ON ACCOUNT # _____UP TO THE AMOUNT OF $ _____ FOR PURCHASES MADE AT PACKARD MOTOR CAR SERVICE, INC. AUCTION TO BE HELD ON WEDNESDAY, NOVEMBER 29TH. NO PURCHASE REMOVED UNTIL COMPLETE SETTLEMENT IS MADE. OTHER TERMS TO BE ANNOUNCED AT TIME OF SALE.

[K8096]

A lot of the stuff in the auction has been for sale on e bay with high prices for quite some time.   

[Restorer32]

You also must forward them a 25% deposit BEFORE bidding by phone. Crazy. No credit cards accepted. Sure keeps out the riff raff like me.

[intimeold]

I attend local auction frequently and the times are changing.  A few years ago even the local ones started to demand a buyer's premium. 

 

With time demands; I can't attend all the auctions what do I do?

 

Solution: First thing is to eliminate the buyer's Premium ones. I just don't attend

 

intimeold

[Steve Moskowitz]

Jeff, online is almost always higher.  Memorabilia and parts always higher than cars but this one takes the cake:  www.agobr.com   All Duryea stuff which we would like to have for giggles BUT and this is a big but,  25% !!!!  

 

Next take a look at the appraised values!  I won't make any editorial comments about them other than wow. 

[Bhigdog]

Vote with your feet, boys. Vote with your feet. Remember:  You are never TAKEN advantage of, you GIVE it...............Bob

[Chris Bamford]

4 minutes ago, Steve Moskowitz said:

"...Next take a look at the appraised values!  I won't make any editorial comments about them other than wow..."

 

Here's my editorial comment:

 

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA

[old car fan]

Done with the premiums as well,

[TerryB]

Buyers premiums are pure robbery, just not done with someone wearing a mask and carrying a gun. I've seen some quoted as high as 28%.  I used to think 10% was outrageous.  A local auction house in my area routinely charges 18% for everyday auction stuff.  I patronize the ones who have little or no fees.

[Joe in Canada]

I have been to many factory closure auctions over the years and have done well. 15% on site and 18% on line + 3% if you use visa is a standard rate. Then some of the larger auctions with modern infrastructure they may charge US dollars here in Canada knowing there will me US bidders on line. You have to decide before the bidding starts what you are willing to pay taking in account of the extra charges. Same statement as the other tread.

[60FlatTop]

Here is a discussion from a group of people whom actually collect automobiles the way kids collect toys. And the tone is whining like they are all on the way to the poor house.

 

Sotheby's stock is about 40 bucks a share and I am sure many others are traded on the open market. You are missing a powerful message.

 

Anyway, thanks for the tip.

Bernie

[John_S_in_Penna]

I see no reason at all for buyers' premiums.

If a car is worth $10,000, and the premium is 10%,

I would bid no higher than $9000.  I'm not fooled! 

 

And as we know, cars are not only for the well-to-do.  If that were the case,

our hobby wouldn't be as widespread as it is.  The affordability

of the hobby makes it enjoyable for people at various income levels.

A $5000 Buick is as much fun as a $50,000 Buick.

 

[39BuickEight]

Premiums and fees all just mean to adjust your bid accordingly.

[Joe in Canada]

Now the first thing you want to do is find out where the owner of this shop is and watch him during the sale if he is biding / running up the price if there is no reserve. I have been to auctions like this before with an owner and his cronies running up the prices so I leave. I see he is using Bidspotter so anything he buys he will also have to pay all costs like anyone else.   

 I do not see anywhere it says this is an absolute auction but the bottom line of  (  terms of sale  )  it states other terms to be announced at time of sale.

 As for the deposit just give them your credit card with your business card  to save on your paper work . This is standard at all Bidspotter auctions and you do not have to go back to get a refund if you bought nothing.

Be a good day to stay home and work on your old car by some of the comments above.

 

[JV Puleo]

I've been buying antiques at auction for 30 years now and I don't believe I've ever been to one that didn't have a buyer's premium. What is relatively new is a charge to the seller although many of the big houses reduce or waive this in order to get a major collection. That said... what difference does it make to the buyer how the price paid is distributed? When I decide to bid I factor in the premium (it's 25% in a lot of UK auctions) and that determines how far I'll go. If this is a problem, perhaps you shouldn't go to auctions. The fact is, it is still the most efficient way to dispose of a large accumulation of anything and, if you are careful and knowledgeable (meaning you take the auctioneer's description with a grain of salt), it is the way to buy. It's just not for everyone.

[mercer09]

remember this JV- the higher the buyers premium, the more unscrupulous the auction house.........................

 

where there's too much money, there is too much greed!

 

I have no problem with an 8% buyers premium, but that's where it stops for me. I dont like games, shills, marks, or any of the rest........................

[Walt G]

I bought a car at an auction in June 2016 (first time ever) , premium was 10%, and yes I did factor that in when I stopped bidding. Fortunately the other fellow who was my competition

had his limit as well and it was a hair below mine. As much as we would like to have a particular car or whatever, there is always more out there if you don't get the one

immediately at hand. I got my "bucket list car" and after some additional $ (of course always more then expected, but I am pretty fussy) spent to get it sorted out because it sat for nearly 40 years I have a reliable wonderful car.

 

[JV Puleo]

53 minutes ago, mercer09 said:

remember this JV- the higher the buyers premium, the more unscrupulous the auction house.........................

 

where there's too much money, there is too much greed!

 

I have no problem with an 8% buyers premium, but that's where it stops for me. I dont like games, shills, marks, or any of the rest........................

 

Sorry, I don't buy it. I will say that the car auction business has had a poor reputation in the auction world for a very long time...

Yes some funny stuff goes on at auctions but my own experience (mostly in the world of 18th century and earlier arms & armour) is that most are ethical. Auction companies are licensed and many of the antics being discussed here are criminal offenses. Certainly funny stuff happens but an auctioneer that condones it can loose their license and/or be prosecuted. I've had personal experience contacting reputable auctioneers regarding items that weren't what they seemed and it was the high end houses, with the highest fees, that were first to pull the items.

 

I'm no cheerleader for the business. There is quite a bit about it that I don't like and I frequently advise potential buyers that "if they need the auctioneer's description, they aren't qualified to buy at auction" but in most cases I am familiar with their errors are the result of ignorance rather than malice. So what are the alternatives? I suspect that, if you are a neophyte, a dealer is the best option... but you'll pay for his value-added services. The original seller... fine if what you want to buy is common, otherwise you may spend years looking. Auctions are a business like any other. I don't see why a buyer's premium is any more outrageous than a $20,000 paint job.

[alsancle]

The Lebaron town car is cool but I'm not sure about the description saying "nearing completion".   Would love some of those metal benches too.

[Restorer32]

A buyers premium adds no value to a car. A $20k paint job does.

[KRK Sr.]

The Bothwell brass car auction last weekend had a 25% buyers fee, 8% California sales tax and $50 to bid. It did not keep people from paying over a million dollars for 2 cars! And, the PA resale lic. from PA is not honored for buying in this auction. I had a friend going and asked him to bid on one item, I can assure you the "fees" were figured in the amount he could bid. Karl

[Matt Harwood]

Anyone object to me adding a 10% buyer's fee to every car in my showroom?

 

Yes, I know the asking price is $50,000, but you need to give me $55,000 to own it. Sorry.

 

What? Yes, the seller is also paying me. But you need to pay me, too. Overhead, you know.

 

Sweet, I just got 10% richer. Suckers.

[mercer09]

well KRK, some of the early cars were given away. to each his own, but you cant fix stupid on the premiums you mention........................

 

 

I have a house Im selling for 100k, think Ill give the realtor another 100k commission, because she's HOT!!!!!!!!!!!!!!!!!!!!!!!!!! 

[alsancle]

I assume that everybody realizes that the seller is paying all costs regardless of what you call the particular fee and how it is collected.

Edited November 17, 2017 by alsancle (see edit history)

[60FlatTop]

13 hours ago, JV Puleo said:

their errors are the result of ignorance rather than malice

 

Hear, hear! That has always been my argument against conspiracy theories. I guess it would work for auctions, too.

 

Just a random thought, what would you think of a group of bidders getting together and planning to stick it to the auctioneer? Imagine an auctioneer bringing THAT case to the Attorney General.

 

Bernie

[Restorer32]

Actually in most states there are laws against buyers colluding to hold down the price of an item. 

 

 

 

 

22 minutes ago, 60FlatTop said:

 

Hear, hear! That has always been my argument against conspiracy theories. I guess it would work for auctions, too.

 

Just a random thought, what would you think of a group of bidders getting together and planning to stick it to the auctioneer? Imagine an auctioneer bringing THAT case to the Attorney General.

 

Bernie

 

[avantey]

I guess you'll never get into art auctions with these reactions.  Did you see where the DaVinci painting that sold the other night had $50 million in fees after the $400 M gavel price?   That works out to 12.5% to Sotheby's, not bad for 20 minutes on the block. 

 

I  do not like the buyer's premium either, just another gouge in my opinion once they have raised the seller's pain to a scream level ( about 35% around here).  But it is America and there is no such thing as too much profit for anybody/ anything nowadays.....

[60FlatTop]

I had an owner contact me about selling his car 0n Ebay. He wanted $70,000 for it. I told him I would do it for a non-refundable $500 photo and listing fee with 5% commission on the total sale. All of the transfer of funds and title were my responsibility. The fiduciary part was my greatest concern. His Wife was listening on another line. I guess she was good at math in her head. She went nuts! And saw very little or no value in promoting the car OR handling the $70,000. As long as the fees aren't hidden and provided in the initial terms it is just the way business is done.

 

On the job I mentioned, I didn't do it or even consider a reduced price. Actually, I would have charged extra for the nuttsy wife's involvement, but I let it drop in my best interest.

 

As far as I know the car is still sitting in the garage. No one has been able to match their (her) perception of value.

 

I don't use auctions. I like my purchases one on one in a controlled atmosphere, not at a circus.

Bernie

[60FlatTop]

34 minutes ago, avantey said:

That works out to 12.5% to Sotheby's, not bad for 20 minutes on the block. 

 

Who is responsible the cash exchange? Just the cost of transport with temperature and humidity requirements was expensive and probably the auction house's expense, as well as handling insurance. I was involved in environmental conditions for a Degas exhibit one time and spent a year meeting the owner's requirements.

 

That stuff is not like restoring a car where just a wave of the hand gets the job done.

[John_S_in_Penna]

1 hour ago, avantey said:

...I  do not like the buyer's premium either, just another gouge in my opinion...

But it is America and there is no such thing as too much profit for anybody/ anything nowadays.....

 

I agree with Bill that there's a conscious or

unconscious element of greed.  Bill, please realize,

though, that that thought is in European auctions as well.

According to Wikipedia, the buyer's premium in Europe is

even subject to their Value Added Tax.

 

Because of high buyer's premiums, in some realms of collectibles,

the seller actually gets MORE than the hammer price of the item.

Fees are negotiable.  In a way, it's all a charade.

 

Once again, people need to look beyond money.

Hobbies are fun if people can get possession, prestige, and profit

out of their primary focus.

[JV Puleo]

2 hours ago, 60FlatTop said:

 

Hear, hear! That has always been my argument against conspiracy theories. I guess it would work for auctions, too.

 

Just a random thought, what would you think of a group of bidders getting together and planning to stick it to the auctioneer? Imagine an auctioneer bringing THAT case to the Attorney General.

 

Bernie

 

As restorer 32 correctly notes, that is illegal in most states. Most states also forbid the auctioneer to bid and, in some, the employees of the auctioneer can't bid. It is done... but not openly. I've been to auctions where I ran into a fellow collector of similar material and we have agreed not to bid against each other on a particular item, usually it involves "if you don't bid on X, I won't bid on Y." That is probably not legal either but it certainly doesn't stop someone else from outbidding both of us – which happens more often than not.

 

That said, the big auctions have a lot of overhead. What do you suppose it costs to print a 300 page color catalog? Or pay to have descriptions written by specialists? Shortly before my father died I took his instruments (he was a concert violist) to Southebys in NY to be auctioned. Most were sold... the best item, his favorite viola, did not do as well as he wanted but his assessment of it's value was as unrealistic at that of many old car sellers. Still, he paid $300 for it when I was about 3 years old and sold it for $17,000 after playing it in the orchestra for 50 years. I don't think there was any sellers premium but we were charged for the full color page in the catalog. Based on my knowledge of printing costs (I am in the publishing business), that was not excessive at all. He could not possibly have sold an instrument like that locally for anything like what he got, even after the fees.

 

 

[cahartley]

3 hours ago, avantey said:

I guess you'll never get into art auctions with these reactions.  Did you see where the DaVinci painting that sold the other night had $50 million in fees after the $400 M gavel price?   That works out to 12.5% to Sotheby's, not bad for 20 minutes on the block. 

 

 

While the "on the block" portion is correct that doesn't account for the many, many, hours spent authenticating and promoting the piece for which several special viewings were held to stimulate interest.

In addition to that the high end auction houses have a PAID staff of experts in any number of specialized fields.

These sales are like babbitting bearings: 99.75% for preparation and finishing and .25% to do the actual pour.

[1935Packard]

It does seem odd, at least to me, that buyers don't collectively demand to auction houses that prices listed to be in actual amount they'll pay, not some lesser amount plus some other amount they have to calculate.   Sure, you can run the numbers in your head and adjust.  But it's an effort, given that every auction has a different premium.  I get why the auction houses like it; for the uninitiated, it creates a false impression that items are cheaper than they are and encourages higher bidding. But it seems odd that this is just understood as the way auctions operate rather than a slimy practice.

[avantey]

cahartley- I understand there is considerable cost to the auction house, my answer was kind of tongue in cheek really.  They have their staff, moving, storage and probably a lot of insurance cost while in their possession (on top of the owner's insurance).  As for appraisals I would think the owner has had it appraised from before he bought it but the house probably still checks the paperwork at least.  That kind of art is in a rarefied atmosphere where our cars do not get.  But I still think 50 mil is a hefty buyer commission on top of what the seller paid.  The seller's commish should have covered the Sotheby's costs and some profit or Sotheby's needs to look at their business model.

 

I'll stick to my orphan cars, I can handle the costs at least.....

[John348]

On 11/16/2017 at 4:49 PM, Steve Moskowitz said:

Jeff, online is almost always higher.  Memorabilia and parts always higher than cars but this one takes the cake:  www.agobr.com   All Duryea stuff which we would like to have for giggles BUT and this is a big but,  25% !!!!  

 

Next take a look at the appraised values!  I won't make any editorial comments about them other than wow. 

 

I had checked that site out and there is some guitar and other music gear that was owned by Neil Young, WITH A 28% BUYERS PREMIUM

[mercer09]

Posted 6 hours ago

I guess you'll never get into art auctions with these reactions.  Did you see where the DaVinci painting that sold the other night had $50 million in fees after the $400 M gavel price?

 

 

and the seller only paid 1.3 million for the painting, because it wasnt supposed to be a "real" Davinci.....................

 

scholars still dont know if this is a real Davinci- not more then 20% of the painting could possibly be and also the painting was very heavily damaged..................

 

(so the next topic in question and not for this thread-how much of an early brass car need be original vs reproduction, for the car to be authentic?}

Edited November 18, 2017 by mercer09 (see edit history)

[John348]

My Father told me a long time ago that buying something at auction only means that you were willing to pay more than anyone else wanted to in the room, I guess the auction houses apply that saying to their business model, "what is a few dollars more on commision if they want it they will pay it"

Edited November 18, 2017 by John348 (see edit history)