There are all types of auctions. The
most famous being those of Sothebys and Christies. Other auctions include,
auctions held in arenas, hotel ball rooms, homes, farms, stores, and so
on. Not every auctioneer has the luxury of having his own auction house.
Some only have a warehouse and a office, and others may not even have a
I would like to believe that most auction houses
would prefer any potential customer to think that all of the items that
the auctioneer has to be auctioned have been consigned to the auction
house for that purpose. Therefore, my first rule for buying at auction
is to not be naive enough to believe that all auction houses, all the
time, only sell consigned items. In many instances right from a large
auction house down to a one or two man farm auction, is to understand
that some of the items that are going to be auctioned, are indeed owned
by the auctioneer.
Consequently, in these cases the auctioneer is selling
for his or her own profit, and not a commission. No auctioneer is going
to tell you the he owns a certain item but, it is worthwhile remembering,
as I will discuss later on.
The hardest part of an auctioneer's job is the finding
of good quality items to sell, not the actual selling of the items. Fortunately,
for the large auction houses many of these items become available to them
because, of their reputation. But even the largest of auction houses do
not sit back on their laurels and wait for people to offer items for them
to sell. They are continually out looking and advertising.
Other than on consignment, there are a number of
ways that a auction house can acquire its merchandise to sell at auction,
although the consignment method is the most preferred because, the auction
house does not have to tie up its own money in merchandise. Some of these
are to purchase a complete estate or estates, and there are various methods
that a auction house will go about finding this type of merchandise. It
is important to note that a auction house may purchase a complete estate
for just one item, such as a rare painting. The balance of the estate
may be sold at a lesser advertised or quality auction, or to people that
sell items at flea markets etc. I will discuss this further in another
article on selling at auction.
Other methods are to acquire end runs, over runs,
merchandise from bankrupt stores, or companies, excess, or unsold inventory
from manufacturers, or stores, and so on.
My second rule for purchasing at auction is to be
aware as to where the item or items that you are interested in have come
from. In some cases this can be easy to tell that they have been brought
in for the auction. For example, if you are attending a auction of the
contents of a house, and contained within that auction are a few pieces
of furniture or jewelry that you know that the owner either could not
have afforded, or did not fit in with the rest of the merchandise, then
it is a pretty good bet that they have been brought in for that particular
auction, and most likely by the auctioneer. The simplest of reasons may
be that the contents of the house were not enough to support having a
auction at the house and therefore, the auctioneer brought in some of
his own merchandise.
Therefore, my third rule for buying at auction is
to be realistic. If there are two or more complete dining room sets for
sale at a house or farm auction, or if there are three antique back to
the walls, hutches, or more items than the house of this type could, or
would normally contain, then it is a very good bet that a lot of fillers
have been brought in to sell at the auction. It is quite possibly done
because, of the location of the auction. Which, if the location is a prominent
one, then from the auctioneers point of view, why not?
My fourth rule of buying at auction is, if you can,
always attend the preview, or to send someone on your behalf at the very
least. That is assuming that there is a preview, which if there is not,
you can always arrive early, and generally you will be allowed to inspect
the merchandise being offered for sale at auction. Depending on the type
of auction, and where it is being held etc. If it is a major auction,
and you have registered, or purchased items from the auctioneer before,
no doubt you will be on his mailing list, and you will have been sent
a flier or a catalog, if you subscribe for them, of the up coming sale.
The earlier that you can inspect the item(s) that
you are interested in the better because, this allows you more time to
do your homework, or research.
Remember, it is not always what you have to pay for
the item but, the what the cost of restoration is afterwards, which can
exceed the purchase price, to put the item in pristine condition as, discussed
in my previous article.
Therefore, my fifth rule for buying at auction is,
to know as much as you can about what it is that you are interested in
buying. As discussed in previous articles, is again to do your homework
or research. Purchase the catalog, and purchase, and use your reference
books. Research price guides, and previous sales indexes. Obtain other
opinions, talk to the auctioneer and so on. Obtain as much knowledge as
you can about the item(s) before the auction.
Now that you have seen the items being offered for
sale at the auction, it is extremely important that you look up in the
catalog the items that you are interested in and make note of the numbers,
and any remarks about the item, such as damage, beside its notation in
the catalog. With any auction, you have to know that what you are looking
at with a number on it is the same item as, described in the catalog.
In catalogs most major auction houses have many disclaimers printed in
the inside covers or elsewhere, within the catalog. It is very important
to read these so you know exactly what the rules are because, they can
differ from one auction to the next.
Now that you have done this, read the description
very slowly and very carefully. Note, the little words such as after,
style, similar, etc. All of these mean that the item is not original but,
a copy. Note, and compare the dates. Sometimes mistakes are made, and
the catalog states a certain date or circa, and the item was not of that
time period. With the hundreds of items that have to be cataloged, unintentional
mistakes turn up here and there, and at a auction you have to remember
that it is, (cravat emptor) buyer beware. You should also read carefully
the descriptions "that in the auctioneer's considered opinion", that this
states or means that etc.
I have spent up to two solid weeks of work just researching
one painting. I found out all about the artist, why this painting was
being sold where it was, and why not in New York, or Europe, where this
painting had been before, if, when, and by whom, had sold it at auction
before, and all of the other recent sales made, at a major auction house,
of any works by this artist, anywhere in the world. Who had sold them,
the size, the subject, the medium, and the price that the works had sold
for, and when. The result was, that when I arrived at the auction to bid
on this particular painting, I knew exactly what it was worth to me. This
was a fully authenticated painting, and I ended up the lucky buyer at
less than twenty five percent of what a painting, by the same artist,
and of a similar subject, size, and medium but, and here is a big but,
that the other painting had recently sold, in New York, by a major auction
house, and that the painting had only been attributed, to the same artist,
and was not fully authenticated. A big difference. I was told afterwards
by the auctioneer that they had been given the whole estate to sell, and
that they agreed with me that the painting should have been sold in New
York, or Europe. Further, that they had even contacted some other auction
houses about it, and that the other auction houses wanted the painting
but, they had not been able to come to a deal within the time period that
No auction house is going to risk loosing possibly
of all, or most of an estate by telling its executors that they would
obtain more money for only one painting elsewhere. They want to make their
commission because, that is why they are in business.
Not all times am I so lucky but, it has happened
to me on a number of occasions, to the point that while I am an acquisitionist
of fine art, other collectors and dealers have asked me, and pay me to
buy for them.
This then brings on my sixth rule for buying at auction.
It is important that you get to know the auctioneer, and that he get to
know you. Depending on what you are purchasing and where, a number of
regular purchasers have worked out with the auctioneer certain signals
that they are bidding. The reason for this is, if a well known person,
or a large dealer attends a auction and bids on a certain item, it can
tell other people that this is an important item, and that they should
make a try for it as well. This can result in driving up the price to
a point higher than it normally would have gone, or that to which the
large dealer was prepared to pay, and therefore, he did not, or could
not, purchase the item so as to make a profit on it at the time of resale
to his customer. As a result, a lot of people who attend a preview never
show up at the auction but, either have someone there to bid for them,
have left a bid with the auctioneer, or are on the telephone with the
auctioneer at the time the item is on the block.
My seventh rule for buying at auction is, the strategy
of bidding. By this time, I have arrived at the auction, have my catalog
in hand, and have registered with the auctioneer to obtain a bidding number
or a "paddle". I never tell anyone at the auction that I am going to bid
on this or that item. The strategy here is to out fox the foxes without
being outfoxed yourself. Much of this is to have, as stated again, "done
your homework". The first thing here is to set a limit on what you are
prepared to pay for the item, and no matter what happens, don't catch
"auction fever", and go over your previously set limit with your bidding.
My eighth rule for buying at auction is, to decide on how you are going
to bid on the item. Are you going to start of bidding at the beginning,
or come in at the middle, or wait to the end. The catch here is, not to
let the auctioneer control your bidding but, you control the amount that
you are prepared to pay, which is as little as possible. So here we go.
Let's assume that you want the next item up for bid, you have done your
homework, and set the limit on the amount that you are prepared to pay.
You have read the catalog and noted the auctioneer's estimates of what
he feels that the item will sell for. Now to determine the reserve bid,
note the lower of the two estimates, and deduct ten percent. This will
usually be very close to the "reserve" bid which is either held by the
auction house, or a consignor as previously discussed. The reserve means
that the auctioneer will not sell the item unless the price being paid
equals, or is higher than the reserved amount. The main point here is
to remember that the auctioneer also, has strategies too, these are designed
to make you pay more for an item than you normally would. At auction,
you should remember that you are buying at the wholesale level, and not
at the retail. How many times I have seen people become caught up with
"auction fever" and end up paying a way more for the item than even the
retail price. Because, they simply have to had it at that moment.
Not all of the following examples of various strategies
always work, all of the time, and it is fun to vary them, just to see
what other people do. And by no means are these all of the strategies
used, however, these are some of the more effective and simpler one's.
One way is, to sit or stand at the front of the auction
audience, and that on every item that you want, that you just hold up
your card or "paddle" high in the air, so everyone at the auction can
see it. Keep it there until the bidding against you stops, and you have
bought the item. This may sound silly but, it becomes very effective as,
you may start off paying a higher price for, say the less expensive items
that you are bidding on but, after a few purchases everyone attending
the auction knows that no matter what, that you are going to end up buying
When the items that you really want come up, and
perhaps they are now the more expensive one's, as soon as, the other people
see your card up in the air, they quit bidding against you because, they
suspect that you will out bid them anyway, so what's the use. On the other
hand, if they really want the item, then they think that they are going
to have to pay the retail or higher price for it. Maybe, in some instances
you force them to do it, and then they realize too late that they overpaid.
Another strategy is, having decided in your mind what the item is worth
to you, is let's say the auctioneer asks one thousand dollars for the
item. No one bids. Then he reduces the asking price to the point that
either there are no bids or the item is withdrawn, or the item is bought
in by the auctioneer. This is accomplished in a number of ways. One is
that he just points to the back of the room and says thank you, and sold
to number 123. This number being the house number. Another way is that
he actually has an employee(s) in the audience bidding up to the reserve
price and then quits. If you are bidding against this kind of situation,
it is important for you to know that the auctioneer will try to have your
bid land on the reserve bid so he sells the item to you. A gutsy way to
bid is, that first you really have to know what the item is really worth
by doing your homework in great detail first. Now let's say that the item
starts out again at one thousand dollars and the auctioneer reduces the
price down to say five hundred dollars when the first bid is taken. Now
he asks seven hundred and fifty dollars. You can either come in here or
wait but, I think that the sooner that you come in is better. Now instead
of raising your hand or card to acknowledge that you are prepared to pay
seven hundred and fifty dollars, you yell out, and I mean yell out, one
thousand dollars. The auctioneer just hates this because, he has to accept
your bid because, it is higher than what he is asking. So now the auctioneer
tries to get control back again and asks twelve hundred and fifty dollars,
and let's suppose someone bids twelve hundred and fifty dollars, now you
again yell out, loud enough, so that everyone in the room can hear you,
two thousand dollars. Now what you have done is thrown your competition
off base. They obviously know that you want the item but, at first the
incremental increase started at two hundred and fifty dollars, and you
changed it to five hundred dollars. Now on the next time around the asked
increment was two hundred and fifty dollars, and you have pushed it up
by seven hundred and fifty dollars. If it comes back to you again, your
competition now realizes that you are going to push them up by at least
a thousand dollars or more, so they quit. They also quit because, they
can't think fast enough to know whether to bid again or not, or what is
going to happen. They just say that it isn't worth it, let him have it.
What you then have accomplished is that you have bought the item for two
thousand dollars, that if the auctioneer had his way, he would have been
able to run it up to five thousand dollars, or more. It can become really
exciting if the increments go into the tens of thousands of dollars.
Another piece of strategy here is to sometimes bid
against your competition in such a manner that you stop short, and he
is left in such a manner that your competition is paying more than he
would have otherwise. Let's say that the incremental increase is one hundred
dollars, and the estimates are twenty five hundred to three thousand dollars.
By deducting ten percent from twenty five hundred dollars, you know that
the reserve price is approximately twenty two hundred and fifty dollars.
You can either jump bid as I just outlined, or you follow up with the
incremental increases. Now if the auctioneer is smart, he will know that
when you make a back and forth slash motion with your hand, that you are
telling him that you are prepared to pay a further half of the incremental
increase. Now you run this up in such a way that you land on lets say
twenty six hundred dollars. Your competition says twenty seven hundred
dollars, you make the slash motion, meaning twenty seven hundred and fifty
dollars, your competition comes in at twenty eight hundred and fifty dollars,
and you stop bidding. Your competition has bought the item for twenty
eight hundred and fifty dollars plus ten or fifteen percent buyers premium,
plus taxes, and he is a way over the estimated amount, and he knows that
you have forced him to overpay for the item. Do this a few times, and
your competition won't bid against you anymore, or if they do, by only
the merest of margins.
This will work against absentee buyers too. Now because,
you are there, and he is not there, and you can pick up the other items
that you want at very good prices because, you have intimidated your competition.
They want no part in bidding against you.
Coming in, in the middle, usually creates a three
way split. Here again the bidding can sort of go around in a circle. Make
sure that you are going to be the person who will land on the reserve
bid, and even jump the bid a bit to do this. This can create enough of
a pause that the auctioneer may just bring the hammer down soon enough
to allow you to buy the item at the reserve price. The auctioneer doesn't
know whether or not anyone else will bid as, everything has stopped. It
is better to sell it now, and have a sure sale, rather than take the risk
that you may withdraw your bid. This works especially well, if it is the
auction house who is the owner of the item. They have made their profit,
and want to move on, as quickly as, possible.
A good point to note here is that the auctioneer
wants to sell as many items as quickly as possible because, if the auction
drags out, people will get tired or bored or both and leave. This he does
not want to happen.
Coming in at the end is another good way to not only
confuse but, disappoint your competition. Especially, if you have bought
previous items. The bidding has come to a halt and the auctioneer is saying
"going once, going twice, last call", and then you come in with your bid.
Your competition is almost rejoicing that they have bought the item, and
then you step in. Now what do they do?
Maybe, they will bid against you a bit. They have
to think fast, usually too fast. What if you just push them up, and stop?
How much more should they pay? Do they just let the item go, and try for
another one? All of these questions are whirling around in their mind,
all at once, all at the same time. Now, if they have done their homework
as you have, you may have a battle, and therefore, you go to your preset
limit again, and stop bidding. You have a fifty -fifty chance of buying
the item at your price. But, if they haven't done their homework, guess
who has the advantage now?
My ninth rule for buying at auction is, to know what
is going on, and what is going to go on beforehand. Some auctioneers try
to make the sale a fun time, while others are extremely serious. The fun
sale, usually is the better one. But you have to be on your guard at all
times. Here is an example of what can happen. At certain auctions, the
auctioneer can have two or three of his employees "working the crowd".
This means that at the preview, or perhaps just before the auction, they
have been talking to or watching who is interested in what. They may carry
a rolled up catalog with them, and just as your item comes up they get
you to bid, they point their rolled up catalog at you, and they yell out
your bid or say yeah, or here, or some other word, indicating to everyone,
that you are bidding. As the bidding starts to wane they are on you saying
look only another fifty dollars, and it's yours. You are very tempted
to go that extra fifty. Especially, with all of the hype going on around
you, and everyone in the room watching you. They may intimidate you to
go that extra fifty but, when you do, then someone else is trying to get
another person to go that further extra fifty too. This way they run you
up an extra two or three hundred dollars that you wouldn't otherwise have
paid. But, no one should think badly of this because, this is their business.
The only thing is to remain calm, and stick to your limit. I personally
think that this is a wonderful way to hold a charitable auction. But then
it is for charity and not business.
My tenth rule for buying at auction is, listen to
every word that the auctioneer says. Sometimes things go so fast you have
to be on your toe's. Like three items being sold every minute. On the
other hand the auctioneer may say " he really wants it". This is simply
doing a customer a favor by telling him that he knows that you are going
to end up buying the item. This has happened to me, exactly in this way.
The auction house's estimate on a painting was twelve to sixteen hundred
dollars. I ended up paying sixty six hundred dollars for this painting.
Why? Because, I had done my homework. Obviously, someone else had too!
But, when the auction records came out the next year, I looked up what
the sales had been for the previous year for this artist, and guess what?
This was the lowest of all of the sales of this artists works. The average
sale including mine was fourteen thousand dollars.
The auctioneer's strategy may be to try to intimidate
you too. To make it look as if you are almost stealing the item. He might
say "you mean only X dollars for this wonderful gem of a work by so and
so? Will not someone at least give fifty dollars more"?
Further, the auctioneer may move the bid up very
fast, and it is extremely important to listen, and to hear every word
that he or she is saying. Because, this is what can happen. If the increments
are one hundred dollar amounts, when the item reaches one or two thousand
dollars, the auctioneer may not ask one thousand one hundred dollars,
or two thousand one hundred dollars, or eleven hundred dollars, or twenty
one hundred dollars. He can just say one, or one hundred. He is implying
that the one or two thousand mark has already been met, and that he is
asking for one hundred dollars more. If you haven't been paying strict
attention, you could end up bidding twenty one hundred dollars while thinking
that you are bidding eleven hundred dollars. The auctioneer's reason for
this is purely psychological. He wants you to be thinking in terms of
hundreds of dollars, rather than in the thousands of dollars.
This way he wants you and others to bid more without
realizing it. It could end up being very embarrassing for you, if you
were the buyer when the hammer fell at one or two thousand dollars more
than what you thought that you were going to pay. The auctioneer further,
has the advantage here as, if you do not take the item, you have embarrassed
yourself in front of everyone at the auction, so to avoid this you end
up overpaying for the item, or if you do not take the item, he then asks
the next lower bid to take the item, and that person generally will because,
they do not want to be embarrassed also. Using this strategy, the auctioneer
has sold the item, possibly for a far greater price than anyone at the
auction ever intended to pay for it.
Now that you have bought those items that you wanted
and have them home, check them out again, and compare them with your catalog.
If you have bought your items from a major auction, and paid a lot of
money, it really pays to check them out. With fine art, take the painting
out of the frame, see if it is really that oil on canvas, or is it a print
glued to canvas and overpainted? Take a ultra violet light and in a dark
room run it all over the painting. Any repaired areas will come up black.
Therefore, is the signature black? If it is, the painting more than likely
is a fake. Now you have approximately two weeks to return it to the auction
house together with the proof that the item is not that as exactly stated
in the catalog to obtain a refund of your money. Check your furniture
for replaced wood, rugs for repairs, glass for cracks, chips, verify that
jewelry, and so on. After everything checks out then display, and appreciate
Now, let's suppose that a item did not sell, and
was bought in by the house. It may be owned by the auction house, or consigned.
Usually, not all items sell at auction but, the auction house by buying
them in during the auction wants to make it look as if every item sold.
If you have the suspicion, or are still interested, there is nothing to
be lost by telephoning the auctioneer the next day to ascertain if the
item was actually sold or not. If it hasn't sold, and you still want the
item, make an offer. Sometimes you will be lucky and get the item at a
even lower price because, the auction house wants to be rid of it as,
they need fresh merchandise for their next auction.
In closing, I want to leave you with a good extra
rule that my father taught me, which also pertains to anything, and this
is, if you really want something, and you don't get it, it means that
the Good Lord, God, Allah, Buddha etc., has something better in store
for you. This has always proven to be correct without exception. It's
also known by a better name called "FAITH". Believe me; it will always
happen for the better, no matter what the situation. So now you know beforehand
that you are not going to be successful with everything that you try.
However, at auctions, and everywhere else, with "FAITH", the law of averages
will always look after you.
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