I bought a cute little Singer child-size sewing machine at auction this week. I was hoping that I’d be the only sewing enthusiast in the room to keep the price low.
There was at least one, though, an internet bidder who kept at it. By the time our tit-for-tat was over, I ended up paying $40 for the machine. Since I have been going to auctions for years, I knew that would not be the final price. I’d have to add a 15 percent buyer’s premium, for a total of $46. That’s the fee the auction house charges me – money that goes into its pocket to help keep its doors open.
The fee is common at most auction houses, and auctioneers at the ones I attend always mention it at the outset. The auctioneer at this particular house always gives an example: You win a bid for $1, you pay $1.15. The fee can range from 10 percent up to 25 percent at auction houses.
The sewing machine was sold at a special auction of coins, stamps, ephemera (documents and photos) and vintage collectibles. The auction was available online through liveauctioneers.com, which meant people from all over the world could bid, offering up a large audience of buyers for the many auction houses that use the service.
Had the internet buyer won the bid, he or she would have paid 18 percent rather than 15 percent. Many auction houses charge a larger fee for the convenience of having a staffer serve as proxy to monitor and call out internet bids.
Most auction houses charge premiums, but some apparently do not. The premiums are part of the income they get to operate their business, along with the commission they charge sellers and their other avenues of income. This particular auction house also sells private and commercial real estate (with a 10 percent premium), and handles government-seized assets.
I’ve never consigned items at this auction house, but a friend who does says the commission is 30 percent of what the item sells for. Another auction house I attend has fees starting at 20 percent down to 7 percent for items selling over $1,000.
Buyer’s premiums seemed to have been used by small auction houses in Britain and other countries for years, but became controversial in 1975 when Sotheby’s and Christie’s in London decided to try them. By charging a fee to buyers, they were able to lower fees to consigners.
The two big houses started with 10 percent, the same as they were charging in New York, which was a little more than the 6 percent to 8 percent at the small houses. These new fees sparked outrage among art dealers, who sued them, and the British government, which investigated them. In the early 1980s, the two auction houses decided to reconsider the size of their fees and how they were publicly reported.
Over the years, the premium has increased: Christie’s and Sotheby’s in New York are up to 25 percent, with 30 percent in some countries. Both have waived commissions, shared buyers’ fees and offered other favors to lure moneyed consigners.
Buying at the mom-and-pop auctions can cost you more than your bid price and premium. Some charge a fee for using a credit card – from 2.5 percent to 4 percent. So I always try to pay in cash on small purchases.
When I’m engaged in bidding, I never figure in the buyer’s premium. I have a friend who always adds on the premium when she’s considering buying a $2,500 or more print at Swann Auction Galleries, whose African American art sale we attend twice a year.
In her head, she sees that print actually costing her $625 more with Swann’s 25 percent premium. That means she’ll pay $3,125 for it, and that does not include the sales tax.
This week, Swann sold more than $1.25 million worth of artwork from the collection of writer Maya Angelou. On its website, it reported the full price paid for a Faith Ringgold quilt that Oprah Winfrey commissioned for Angelou’s birthday in 1989.
The quilt sold for $380,000 at auction, but the buyer ended up paying $461,000 after about a 22 percent buyer’s premium (Swann has a graduated fee scale). The latter price can be found on Swann’s website, along with a notation that it included the premium and a link to the hammer price (the bid price for an item).
So, if you own a Ringgold quilt (or any other artwork) and were wondering about its worth, be sure to look at the hammer price. That’s the real value of an item at that particular time.
