Big Auction Houses and Buyers Fees

[Jussi Ekholm]

Well I've just recently started looking some auction houses around the world and what they have to offer. As a student my budget is limited and I already have my mind on what my next purchase will be, however I saw one piece that caught my intrest a bit. I was pondering if it would go for the lower end of the estimate it might be a good deal, I was planning to ask more information and hopefully more pictures from their specialist, until it hit me... Buyers Premium 25% will be added to hammer prices.

 

Now I started to reasearch info on auction houses and their extra fees, and learned about this so called Buyers Premium that every auction house seems to have, and some had other fees too. Needless to say that I won't be buying any swords from auction houses at least for several years. I spun some numbers around and from European auctions I would have to pay c.30% on top of the hammer price and outside EU c.40%.

 

I've read that auctions of these big auction houses seem to be get together places for the elite, and after finding out about the Buyers Fee + other possible fees, I understood why they mainly intrest the upper class.

 

Well my intrest in the subject is purely on nihonto but don't know if this will be more suitable discussion for Izakaya. I would like to hear what members here think of the auction houses in the current state (very high buyers fees) and if it's you have been able to get a good deal sometimes? Well this will of course be purely subjective matter, but I just thought I could write a post about the big buyers fees in case some novice collector like myself might not know how it goes.

[kusunokimasahige]

Having worked for a few auction houses as a porter I have seen their workings up close and it is partly true what you say.

 

The buyer fee is the thing auction houses get their money from. Some even have a seller fee. It is called commission.

The auctioneer makes it possible for sellers to sell and buyers to buy using a bid system, but of course the auction house, lights, staff etcetera need to be payed as well as a profit needs to be made.

 

The larger auction houses which sell high end art and artifacts of course will be expensive but even there you sometimes as a buyer can get a bargain if no one bids. That it is somehow an "elite" hobby to buy art or collect high end art swords is nothing new. What you might do is start out with the lower end auction houses and scour their catalogues. Sometimes, not often if the seller knows his stuff of course, you might find a gem for a fair price.

 

The bidding system is fairly honest, but when dealers start shill bidding which is an offense by law but difficult to control or make out, John the Plumber wont be able to buy stuff quickly. Same with paper bids. A buyer puts in a max bid for say: 2000 US$, but the bidding in the auction room stops at 1500. Then the item is sold for 1500 to the bidder who put a max bid of 2000 in. No problem of course, but well if you do not have the money you should not bid of course...

I still visit many auctions and enjoy them fully, even when they are "elite" auctions where I wont bid at all because I am not rich. What is very interesting to me are the price ranges and price settings for items. There are good books for sale like the Millers Antiques guide which collect prices items have sold for. In that way you can estimate the things you have yourself, the things you find at junk markets or the things you like to have. Mind you, its an estimate, and it depends on the day as well as the bidders whether or not the bidding will go into a frenzy, making your item sell for a ridiculous price.

 

If the auctioneer is a very good one, he might be able to steer the room a little.

 

Collecting Nihonto is, if you want high end swords, not for the small of purse, but if you are willing to learn and invest in the "hobby" and save up untill you know what you are buying because you have studied the subject, you might one day own a precious and superexpensive sword, all depending on the size of your purse or your saving's account.

Some buy a car, others buy a sword.

 

Be prepared though to make losses buying and selling antiques. Getting the best price for an item is the greatest thrill for both buyers and sellers. Bartering is part of the antiques dealing language, and it goes both ways. you wont make a slammer always.

 

KM

[Jean]

I shall say that between the Seller and the Buyer, an Auction house, in France, takes between 25% to 45% of the selling price

[Clive Sinclaire]

Gentlemen

There is no doubt that auctioneer's buying premiums and selling commissions are very high and I know a couple of collectors who refuse to buy at auction because of this. I have said to them, that I think that the important thing is the price which you must pay for a Lot to "clear the room" as they say, not how this price is made up. I have seen, even in recent months, where prices realised have been very low indeed, even after accounting for auction fees. There is no doubt that we are in a slump as far as Japanese swords are concerned and that it is a good time to buy and opportunities should not be missed, even at auction.

Finally, I would point out that, even if you only buy from dealers, it is very likely that their stock has been through auction at some stage. As has already been said, Japanese sword collecting is not a poor man's hobby and if price is the sole arbiter of what you collect, you are unlikely to accumulate any collection of note or improve your knowledge of Japanese sword culture.

Finally, I am very lucky. Having seen and handled many very fine swords, including National Treasures, Masamune's etc etc. on numerous trips to Japan, I fully realise that I can never own such things but they are always there for me to enjoy and therefore, there is no need to actually own them although of course, I still buy swords. The point is. I suppose, that there is now no urgency about acquisition or ownership and price is of less importance. These viewing / study opportunities are there for everyone.

I hope I make myself clear although I realise this may sound crass and rather silly to some, but there you are.

Regards

Clive Sinclaire

[Jussi Ekholm]

Thanks for the insight, after reading my opening post again parts of it did sound more stupid that I originally intended.

 

The main thing is I've eyed some auction catalogs and saw some great deals. And even with the added fees they would still be good prices. So I have nothing against the auctions or auction houses, just the fact that the Buyers Fee put me little off guard as I hadn't heard of it before (thought the hammer price=price you pay). I thought the profit to auction houses came from commissions. I guess within time you'll develop sense by conciously adding one quarter to the prices without even thinking.

 

To be honest I'm very intrested about auctions, well otherwise I wouldn't have brought the subject up in the first place (although I agree, I should have written it in different tone). I've seen plenty of great auctions take place in London, and for me it is within a travelling distance. One part that really intrests me is the seeing of the items, and like Henk-Jan wrote, just seeing people bid on high quality items and trying to guess at which price something will go, and seeing how far off my own guesses will be. Will you be able to get a chance too see the items day before the auction or so, as I believe it works like this?

 

Like I said in opening I have no knowledge regarding auctions, and I would like to learn much of them. What is "clearing the room" or what happens if nobody bids on an item?

 

As some lots seem to have large amounts of weaponry it would be perfect addition to museums and dealers to get to see items in auction house too in one trip. Just trying to maximize my chances to see intresting items if I'd travel abroad.

[BSA]

As artifact and art, nihonto are a bargain. That does not mean they are cheap. Still, the level of craftsmanship you can acquire for under $10k is pretty amazing. When you look at the upper end of the spectrum you’re usually in the hundreds of thousands of dollars and not the millions. Compare that to the rest of the art world. It’s the double edge sword, if you’ll forgive the term, of a niche hobby, recognition vs. accessibility.

 

For the most part an auction is a place to be certain, not take a chance. You must factor your premiums, taxes and any other fees into the final price, and be sure of the item yourself. You must also be familiar with the auction house you’re buying from and their policies. Not all auction houses will stand behind their description.

 

It comes down to your end goals, are you buying it as art or an investment? Art is personal, if a particular sword or fitting speaks to you, it’s worth what you pay. That doesn’t mean you’ll recoup the price. Markets fluctuate. I have yet to buy a sword at auction, but I have more than a few auction catalogs, the photography can sure be nice.

[edzo]

Hi guys, my slant;

How I approach auction sales..

I plan it by first assessing the fees and taxes plus any other related taxes or charges that affect the final cost. This will vary by location and country. I avoid the estimates provided which I believe is intended to either stimulate a buyer (low estimates), appease a consignor or to avoid conflict with a consignor after the sale (If you valued it for x why would it sell for y). Some auction houses do not make it clear to sellers that they are essentially liquidators that is to say wholesalers not retailers. People sometime loose site of the fact that that art is an illiquid investment that parallels other economic conditions, like real estate etc. which affect the demand and price. Once I have calculated the buyer factor which will likely be assessed to the hammer price I examine the item to the extent possible including correspondence if necessary and set my Bid limit per item (What’s it worth to me), primarily to avoid getting dragged into a bidding frenzy at the moment. This has happened to me when I started attending auctions. My personal feeling right now is that it is a great time to buy. Things are down and have been so for a while now. Eventually the market will come back and you will likely find that you purchased the item right assuming, you make an informed decision if your thinking investment and return. I only purchase what makes my heart sing. Regards and Luck, Ed F.