ChatterBank1 min ago
Buying and Selling at Auctions
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Can anybody tell me who pays the commission when buying and selling at an auction and how much do they charge. Is it the buyer, the seller, or both?
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Milvus's answer might not be wholly accurate.
All auction houses charge the seller commission. This is typically 10% to 15% of the hammer price (although it can be higher), plus VAT. Some auction rooms also charge a flat ''entry fee' (plus VAT) on top of the commission
Many auction houses also charge a 'buyer's premium'. This used to be fairly rare but is now increasingly common. The buyer's premium (where it exists) is usually also in the region of 10% to 15% of the hammer price, plus VAT.
For some examples, lets supposes that several bidders (in different auction rooms) all make successful bids of �20 for the items that they want.
Fred, who's at an auction where there's no buyer's premium, is buying an item entered into the auction by a private seller. He'll pay �20.
Mary is buying a similar item but in an auction room where there's a 15% (plus VAT) buyer's premium. She'll pay �23.45.
Joe is at another auction where there's a 15% (plus VAT) buyer's premium but he's buying an item being sold by the receiver disposing of the assets of a VAT-registered liquidated business. (That means that there's VAT on the hammer price, as well as on the buyer's premium). So he'll pay �26.45.
Chris
All auction houses charge the seller commission. This is typically 10% to 15% of the hammer price (although it can be higher), plus VAT. Some auction rooms also charge a flat ''entry fee' (plus VAT) on top of the commission
Many auction houses also charge a 'buyer's premium'. This used to be fairly rare but is now increasingly common. The buyer's premium (where it exists) is usually also in the region of 10% to 15% of the hammer price, plus VAT.
For some examples, lets supposes that several bidders (in different auction rooms) all make successful bids of �20 for the items that they want.
Fred, who's at an auction where there's no buyer's premium, is buying an item entered into the auction by a private seller. He'll pay �20.
Mary is buying a similar item but in an auction room where there's a 15% (plus VAT) buyer's premium. She'll pay �23.45.
Joe is at another auction where there's a 15% (plus VAT) buyer's premium but he's buying an item being sold by the receiver disposing of the assets of a VAT-registered liquidated business. (That means that there's VAT on the hammer price, as well as on the buyer's premium). So he'll pay �26.45.
Chris
As Chris indicates,Auction Houses used only (when I was younger) to charge the Seller,the Buyer paid nothing.
Sadly quite a few years ago,one large auction house,I think it was Christie's,bought in a (variable) buyers premium.
ALL the other Auction Houses raised their hands in horror and said "We will NEVER charge the buyer".Of course when they saw the money that the Buyers premium made they soon jumped on the bandwagon!
So now at most Auctions not only does the Seller pay a fee,so does the Buyer!
Not only this but if the Buyer pays by Credit Card a further fee is involved.If the Seller sets the reserve too high (or what the Auction House thinks is too high)and the item doesn't sell because of this, they can charge the seller a fee for that too.If the item remains unsold and goes into the next Auction, some Auction Houses charge a storage fee too!
They can't lose can they?
This is why EBay is flourishing.Sellers only pay a fee dependant on the sold price,and the Buyer pays nothing but the end price (plus P&P)
It is is to be hope that is this recession the greedy Auction House will realise the error of their ways and at least lower their fees etc.
Sadly quite a few years ago,one large auction house,I think it was Christie's,bought in a (variable) buyers premium.
ALL the other Auction Houses raised their hands in horror and said "We will NEVER charge the buyer".Of course when they saw the money that the Buyers premium made they soon jumped on the bandwagon!
So now at most Auctions not only does the Seller pay a fee,so does the Buyer!
Not only this but if the Buyer pays by Credit Card a further fee is involved.If the Seller sets the reserve too high (or what the Auction House thinks is too high)and the item doesn't sell because of this, they can charge the seller a fee for that too.If the item remains unsold and goes into the next Auction, some Auction Houses charge a storage fee too!
They can't lose can they?
This is why EBay is flourishing.Sellers only pay a fee dependant on the sold price,and the Buyer pays nothing but the end price (plus P&P)
It is is to be hope that is this recession the greedy Auction House will realise the error of their ways and at least lower their fees etc.
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