It’s no surprise if the public’s image of auctions is wildly divergent. On one hand, we’re treated to televised images of the wealthy and well-connected vying for a former first lady’s belongings. Then, there are the ubiquitous auctions of rugs, automobiles or “seized” goods that exude blue-collar appeal.
There are auctions that cater to most any type of buyer and price range. Everything from Picassos to pigs are sold at auction. And although auctions have an aura of mystique and exclusivity, the truth is that anyone can go to an auction.
“It’s not an intimidating, scary thing,” says Leslie Hindman of Leslie Hindman Auctioneers in Chicago.
To attend an auction, you don’t have to show a bank account statement, prove your social pedigree or demonstrate your knowledge about the items for sale. You do need to bring some common sense, self-restraint and, in some cases, a wary demeanor.
By following these pointers, you can make auctions an enjoyable experience:
– Beware of inventory sales masquerading as auctions. An absolute auction is one in which the auctioneer truly intends to sell the items at prices determined by the current market of buyers. However, some merchants advertise as “auctions” what are essentially inventory sales. These events are ploys to draw unsuspecting customers who think they have a unique opportunity to purchase items at rock-bottom prices.
In truth, the merchant (and owner of the items) is still trying to get a certain price for his goods, so hype is plentiful and bargains are scarce. Reputable auctioneers don’t own the items they sell; rather they take a percentage of the sale’s proceeds. It’s in their best interest to sell items at prices that seem fair to sellers and reasonable to buyers.
– Don’t expect to get something for nothing. It’s a fantasy to think you’ll abscond with some valuable item at a token price because you alone recognized its value. “People assume that things are going to go for free,” says Jeff Brown of Ace Auctioneers Inc., who conducts auctions for the Chicago Police Department. “Not every item sells for next to nothing, but there are bargains to be had.”
Not only do fellow bidders tend to prevent someone “stealing” an item, but many items have a “reserve price,” a confidential minimum price agreed upon between the auctioneer and seller. If there is a reserve on a “lot”–auction lingo for the collection of items up for sale–auctioneers generally ask for a certain opening bid. A reputable auctioneer will set a reserve that is consistent with the item’s estimated value. However, auctioneers trying to sell their own goods may set unrealistically high reserves in an effort to inflate values.
– Choose your auctions carefully. The best way to find out about the variety of auctions is to read the auction ad section in your local newspaper, particularly on Sunday. Many auction houses will also put you on their mailing lists. Read ads carefully and look for the name of the company or auctioneer conducting the sale. Most reputable auction companies include their names in ads, Brown says, or if it’s a bankruptcy auction, a trustee will be listed.
In perusing ads, don’t be foolbed by auctions that trumped the sale of “seized” goods or often misleadingly suggest that an auction is being conducted by a federal agency. The fine print will usually explain that some of the auction items originated at a government-sanctioned sale of seized items.
“You have to learn to read the wording,” Brown says.
Finally, consider the auction site in selecting an auction to attend. Most established auctioneers either hold auctions at their own place of business or at a seller’s location, such as on police property in the case of police auctions.
“I think that most reputable auction houses have a permanent place where they hold their auctions,” says Hindman. “I would tend to be leery of auctions held in hotels.”
– Educate yourself. If you’re going to buy art, research the items and artists you’re interested in and determine what the current market value is for the art. You may still choose to overpay for the art because you love it, but at least you’ll know you’re overpaying.
Publications are available at libraries and bookstores that list the prices paid at recent auctions for works by significant artists. Some popular reference books are Gordon’s Print Price Annual, Art Sales Index and Art Price Current. Auctioneers rely on such publications to determine pre-sale estimates. Buyers can use the books to gauge whether reserve and bid prices are in line with an item’s historical value.
Art reference books help to underscore the wide price discrepancy often seen in works by well-known commercial artists such as LeRoy Neiman and Peter Max, whose works typically sell for considerably more at retail than at auction. By knowing first-hand what the market value is for an artist’s work, you’re less likely to be snared by a good sales pitch.
For those buying something more mundane, such as bicycles or automobiles, take advantage of the opportunity to inspect the merchandise and bring a mechanic along, if necessary, since merchandise is sold “as is.”
– Know the terms. Additional charges, such as buyer’s premiums, have become commonplace at auctions. These charges are typically well-publicized in printed auction materials and announced at the start of an auction. Most auction houses charge a buyer’s premium of 10 to 15 percent of the final bid price, plus the applicable sales tax.
– Pay attention. The notion that you might scratch your nose and end up “buying” an expensive piece of art is a misconception, but you do have to stay alert during bidding. Once you begin bidding on an item, the auctioneer will continue to look toward you as the bidding continues.
“Make eye contact with the auctioneer, make sure that they know you’re bidding and that they acknowledge you with the proper bid,” Brown says.
He also warns bidders to stay engaged in the action and not lag on every bid; otherwise, the gavel may fall while a bidder is still deliberating. Auctioneers use the term “fair warning” to alert bidders that they have one final opportunity to top the last bid before the item is sold.
Also, be on the lookout for “shills.” Some disreputable auctioneers plant associates in the crowd to bid prices up and encourage participation.
Hindman says it’s important for auction attendees to have some assurance they’re buying from someone reputable. She encourages those interested in attending auctions to check out an auctioneer’s reputation by asking questions of fellow auctioneers and established art or antique dealers.
