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The cost of selling at auction
We have all seen the prestigious auction houses on television with pieces being sold for thousands of pounds under the hammer.
Have you ever thought about the costs involved for both the vendor and seller?
The details below are taken from a local auction house’s terms and conditions.
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The vendor or seller:
Commission on sale 15%
Loss and damage warranty 1.5%
Lotting and internet fee £5.00
Photo for catalogue £10.00
If the lot sells for £1000.00, we need to deduct:
Commission £150.00
Loss and damage warranty £15.00
Lotting fee £5.00
Photo £10
Total charges £180 + 20% VAT = £216.00
The buyer:
Buyers commission of 28% £280.00 + VAT = £336.00
Total charge £552.00 +VAT
So to reiterate on a hammer price sale of £1000.00 the auction house makes £552.00
Part of the fees charge are for insurance, but what are you insured for? If the piece is damaged will the auction house pay out to replace it or repair it? We have established that a lot is worth up to 28% (the buyers commission) more than the hammer price so at best any insurance pay-out based on mid estimate will be the buyers commission short – nearly £300.00 on a £1000.00 piece!
“Occasionally” an auctioneer will give a piece a “come and buy” me estimate to entice the trade, this is sneaky at best and in my opinion fraud at worst. A diamond ring for instance valued at £200.00 - £250.00 but worth £1000.00. is stolen at viewing. The vendor will be paid mid estimate £225.00 by the insurance company when the ring is worth £1000.00 + the commission.
Only recently I heard of another old trick, two paintings taken in for auction and valued, the vendor was happy with the estimate and left them to be sold. A week later he received a call that the paintings had been lost – how you can lose two 4’ by 2’ paintings is beyond me, of course the insurance paid out. Were they originally valued by a young, inexperienced valuer who valued them too low and then once their true value was realised “lost” for a future sale in two or three years?
The saleroom saga gets worse, the buyer must pay straight away, the seller must wait eighteen days and will be paid via cheque which will take five working days to clear.
In addition to all the above your item may not sell and you could be charged up to £12.00 for any unsold lot, you then need to go to the expense of picking it up or arranging for transport to return it.
We offer a free valuation service and pay cash.
No commissions, no waiting, no hassle.
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