Live auctions can be a lot of fun. Just be sure you are prepared for the terminology used so casually during the sale by the auction house.
Buying goods at auction is one of the most common ways dealers acquire inventory for their shops. It is one of the few places where collectors get a chance to compete on level ground with dealers for choice items. But conducting an auction is a complicated business. Auctioneers go to school to learn their trade and there is a codified set of rules that regulate how the business works. Like almost any specialty, there is also a vocabulary that accompanies the trade and if you intend to participate in an auction you should know some of the basic lingo—not just so you know what is going on but to protect yourself as well.
Here are some basic auction concepts in no particular order.
RESERVE – This is the minimum price the owner/consignor of a piece of merchandise will accept at auction for the merchandise. This amount may or may not be disclosed before the sale; it usually is not. The owner is not legally obligated to accept any bid lower than the reserve but may do so at his/her discretion.
ABSOLUTE AUCTION – This is a sale at which there are no established reserves and every item offered for sale is sold to the highest bidder, no matter the price. All auctions are deemed to be with reserves unless it is announced beforehand that this is an “absolute” auction.
PASSED – What happens when an item does not reach its reserve price. It is “passed” or withdrawn from the sale.
BOUGHT IN – When it appears that an item will not reach a certain price, the “house” enters a bid so that it appears the item was sold but it actually was withdrawn at the auctioneer’s discretion to be offered for sale another time.
LOT – This is what individual items for sale are called. A lot may also be a group of items to be sold together or offered for a “choice” bid.
CONDITIONS OF SALE – This is the fine print seen in most auction ads and catalogs. It sets out the various in house rules of the sale such as buyer’s premium, convenience fees, discounts, acceptable lines of credit, check acceptance policies, terms of delivery, etc. Be sure you are familiar with the conditions if you intend to bid.
BUYER’S PREMIUM – Known in the trade as “the juice,” it is the amount, expressed as a percentage of the winning bid, that is added to the final cost of the item. For example, with a buyer’s premium of 10 percent, an item that received a winning bid of $100 would cost the buyer $110, plus any applicable sales or use taxes.
CONVENIENCE FEE – This a charge imposed by some auction houses on sales which are paid for with a credit card as a way to recover the fees charged by the credit card companies. In some states this is against the merchant agreement, so instead of charging a specific “convenience fee,” the auction facility charges a higher buyer’s premium but discounts it for cash or check, leaving the credit card user still paying a higher fee.
AS IS, WHERE IS – A term used by auction houses to expressly NOT guarantee that the item for sale is anything other that what you see in the place where you see it. It is a reinforcement of the “buyer beware” conditions that apply at all auctions.
ABSENTEE – This is a term that refers to someone who is not actually at the auction but who wishes to bid on an item. In this case they will have left a written bid expressing the highest price they will pay for an item. If the bidding does not reach or exceed their bid (called a “left” bid) they win the item for the next bid increment above the highest onsite bid that does not exceed their maximum price.
BID INCREMENT – The informal amount by which successive bids increase during a sale. Higher priced items usually have higher bid increments. If the auctioneer is accepting bids increasing in $50 increments, say from $150 to $200, he may be unwilling to “split the bid” and accept a bid of $175. But then again he may. It’s up to the auctioneer.
JUMP BID – A tactic used to intimidate less-committed buyers. A bidder may substantially increase the current bid over the bid increment to force out other bidders.
ONE MONEY – The price the auctioneer is seeking when a lot has multiple items—a pair of chairs for example for one price for the pair.
X TIMES THE MONEY – The opposite of “one money.” The bids are for one item only. If there are two items the final price is two times the bid, for three items, three times the bid, etc.
CHOICE BID – When there are multiple items in a lot, the auctioneer may ask for a choice bid meaning the winner gets his choice of any item in the lot for the winning bid. The auctioneer will then go the second-highest bidder, the back up bid, and ask if he wants the any other item for the same money. If not, the bidding starts over again for each item in the lot.
FAIR WARNING – A phrase used by many auctioneers just before the hammer falls to indicate that he is about to accept the last bid and bidding on the item will cease. It serves notice that the sale is about to be over.
HAMMER PRICE – The winning bid.
PHANTOM BID – Also known as a “chandelier” bid or an “off the wall” bid. This is a bid announced by the bid caller even though there is no bid of this amount. It is a device sometimes used by bid callers to keep the bid alive and moving upward.
Fred Taylor is a antique furniture Worthologist who specializes in American furniture from the Late Classicism period (1830-1850).
Send your comments, questions and pictures to me at PO Box 215, Crystal River, FL 34423 or firstname.lastname@example.org.
Visit Fred’s website at www.furnituredetective.com. His book “How To Be A Furniture Detective” is now available for $18.95 plus $3 shipping. Send check or money order for $21.95 to Fred Taylor, PO Box 215, Crystal River, FL 34423.
Fred and Gail Taylor’s DVD, “Identification of Older & Antique Furniture,” ($17 + $3 S&H) and a bound compilation of the first 60 columns of “Common Sense Antiques,” by Fred Taylor ($25 + $3 S&H) are also available at the same address. For more information call 800-387-6377, fax 352-563-2916, or e-mail email@example.com. All products are also available directly from the website.
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