This does not include my lease, Internet service, phone service, water, trash, electric, gas, computer equipment, camera equipment, paper for printing invoices, receipts on credit card machine, paper labels, advertising, website, software, banking fees, Chargebacks, disputes for to customer thinking I am a store and not an auction, it all adds up. Because of this, our auction commission is much more of a value to our customers. Call it what you may, it is simply a tax on a tax regardless who receives it. If the public band together and boycott these auctions then the practice would soon be stopped. Learn more about CSR2. I imagine that if the house did that, the seller would balk at the price. And even after the sale is confirmed, they undertake the responsibility to deliver and clear payments. Would the tax and the premium be tax deductible as separate line items? andrew@BostBenefitAuctions.com We help people sell land using listing and auction processes. We serve Iowa, Minnesota, South Dakota, Nebraska and Missouri. You set a reserve price. This is measured through user feedback, quantity of sales and other proprietary data. They specialize in farmland sales primarily serving the heirs to family farms all across Iowa and surrounding states. Pingback: Guarantee & Split Auctions Mike Brandly, Auctioneer Blog, Pingback: Charity auctioneers charging commissions Mike Brandly, Auctioneer Blog, Pingback: FUNDRAISING AUCTIONEER FOR AUCTION | Impact Auctions. I have seen percentages that the seller pays to consign sale items to the auctioneer, as much as 30%. His companys auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. Lastly, suggesting that it is necessary or acceptable because everyone else is doing it, is simply ridiculous. Specialists in over 60 collecting categories. Lots that came from outside the UK may also incur additional charges: look out for details in the auction houses catalogue. The sale will take place on the selling date. ", Keep in mind, however, auction clearance rates fluctuate and are not the whole story.You also need to factor in the volume of properties that go to auction in any given timeframe. The extra expenses are not tax-deductible nor recoverable. I might be able to get some paintings for low prices by going for auctions. WebAuctionZip is the world's largest online auction marketplace for local auctions - today, this weekend, and every day. It would be fairer to charge an entrance fee at the door so buyers would know what they are paying up front. Charity Auction Services LLC. Nothing particularly customary so far as rates to be a picker or the like. Basically, auctioneers receive a commission (a certain percentage of the sale price, typically between 1.5% and 2.0%) and an entry fee (usually between $300 and $750). So the 15% that I charge doesnt even cover my expenses that I am charged to have an auction. Now, there certainly is no pressure to utilize this method, but when clients elect to use our real estate services, live auctions or online auction platform there are many benefits. Car auctions often charge a flat fee per car, somewhere between $2501,000. On average, our first-year clients see a 109% revenue increase in Live Auction and Paddles Up over the previous years auctioneer. This IS another way to nickel and dime people. Mike Brandly, Auctioneer, CAI, AARE said: An auction was held and the Estate has been charged 20% plus expenses? Auctioneers may be employed by a seller who might be conducting auctions on some regular basis. In my business I used to work closely with a local major auction house. The reason why marketing for an auction can be more expensive is because you have to start marketing well in advance of the auction date and reach as wide a market as you possibly can. Copyright Metropress Ltd, (t/a Auction Technology Group) 2023. cannot be passed on to the buyer and explained away as But think about us were just a poor small business! Nothing on this page is an offer or guarantee of a particular fee. The modern times the buyers premium was introduced by Christies and Sothebys in London in September 1975 and in the United States is 1977. Why are we paying a sales tax on the combined price of what the hammer says and then the buyers premium total too. I dont agree but I understand. For more information, read our article How a property auction works and take note of this advice: A good real estate agent will keep all interested parties abreast of developments until the day of auction - a good way of maintaining their interest in a property. Though I hate knowing the 18% buyers premium I just paid as a buyer is on TOP of the fee the auction house charged the seller, if they can get it, more power to them thats what free enterprise is all about. When it comes to selling your land, getting the most value is of utmost importance; the cost of enlisting help from a professional auction company shouldnt significantly lower your net income from the sale. An auction house cannot say with conscience that they are doing their best for the seller. Even if you don't meet the reserve price, some buyers may still want to negotiate after the auction. However, many online are now charging shipping and packing costs as well. You just add them as the cost of the item. And they have. JavaScript is disabled. I think the shipping receipts should be provided to the buyer because it appears the premium isnt paying such and certain on line auctions may be overcharging both parties. Under the right circumstances, selling at auction could help you realise a higher sale price than a private sale., If you have questions like, 'how much does an auctioneer cost? Fee and expenses: Auctioneers sometimes charge their commission, hourly or flat fee, plus the expenses they incurred. If they are charging a packing fee then I would shop elsewhere. The premium allows auction houses to make prices LOOK more attractive by not factoring in the surcharge beforehand. For most auction houses, especially smaller ones, the buyers premium helps to cover the costs of running the auction house and its ongoing auctions. Call, text or email to have a confidential conversation about commission fees. The amount of the buyers premium will normally be clearly stated in the auction house terms and conditions. There are two parties to an auction. These expenses may include costs associated with travel, lodging, meals or marketing efforts. Insurance value reflects what we believe it would cost to replace an item. A global network of Occasionally, there are additional auction fees relating to specific lots in a sale. I was always told that I paid a buyers premium to enable the consigner to get a fair price for the piece (the assumption being that the consigner would not be assessed a high fee). just talked about 1% plus "advertising" costs PLUS vat. FIre them , and send a message no more buyers commisions!! The only doubt I'd have is the property signage which is probably inflated since it is most likely their own sign? Auction houses can charge 35% to the seller, 10% 18% or higher for Buyer premium. It enables us to offer our services at completely no cost to the homeowner. One benefit auctioneer is known to say there are at least forty-two different ways for charity auctioneers to be compensated. While this is nodoubt a true statement, its easier to think of those forty-two ways broken down into just two main categories, one of which most fundraising auctioneers will offer some version of: flat fee and performance-based fee. Most real estate agent contracts stipulate that the agent has sole selling rights until the day of the auction and for a set period of time afterwards. They have lost my respect and tructand referrals by this new policy. Thats not how bidding psychology generally works, mate. I have to say I am shocked to learn of the buyers premium which didnt exist in the past and consider it to be outrageous! Not the buyer AND the seller. When I sell on any of my multiple platforms guess who gets charged when a purchase is made? You collect costs from the SELLER and it is up to the auction house to get the best price possible on the day for an item. To be eligible for our retainer product, they must satisfy certain benchmarks and then maintain the highest level of quality. DreamDirt accommodates clients fairly with fees that reflect the value of not only your land, but your auctioneers experience, insurance, credibility, and marketing capabilities as well. Scott Hueckman. But why charge a buyers premium anyway? It depends on what you are using the items for. NOWHERE. Its deceptive plain and simple. The problem with your analogy is the transparency of cost. Auctioneers charge either by the hour, a percentage, flat rate, or otherwise. Express Warranties by Affirmation, Promise, Description, Sample, Guarantee & Split Auctions Mike Brandly, Auctioneer Blog, Charity auctioneers charging commissions Mike Brandly, Auctioneer Blog, FUNDRAISING AUCTIONEER FOR AUCTION | Impact Auctions, Auctioneers are asked, What do you charge? | Mike Brandly, Auctioneer Blog. I dont believe in the buyers premium if and is most always a Sellers premium is also charged. Me! Thats more than twice the prior year, on average! Auctioneers tell me benefit doesnt matter, AS IS and what it is, maybe is, orisnt, Calculating the buyer's premium at an auction. You get a piece of mind that all the bases are covered and, in the end, you walk away satisfied everything is proper and there are no lingering concerns or fears. Its just a matter of time till everyone else falls in line, like it or not. My cost expenses just for software, platform, company fees I am charged to use their services to upload my auction to and credit card companies interest fees etc cost me 18.5%. The lot description and the auction houses catalogue will display these. Having to calculate a premium destabilizes the game, and therefore- for multiple reasons the seller is NOT the only one hurt. Nothing personal but this is not the way to go, especially as the seller already pays fees/commission to cover said expenses. If your auction house gave a better deal than everywhere else, and charged no buyers premium, Id say to myself I get to keep more of the final sale price, and buyers will be more likely to bid higher on my item because theyre not paying additional fees like they would at So and Sos auction house. Your email address will not be published. The question is Why is the buyers premium an add-on after the winning bid is set instead of a deduction from the winning bid? The latter allows the winning bidder to know exactly what they will have to pay when they say a number in a fast-paced, high-stress environment when the buyer is already faced with the adrenaline rush of having to compete to win the item. I may not like this, especially since I believe the seller may not receive a lot, but I understand such. Each state does however have different rules and regulations around property auctions, including cooling off periods and requirements to pre-register.. Categorized under Auctioneers. Its not uncommon to see a 90% commission if its an extremely labor-intensive sale that addresses a hoarding situation with a lot of clean up and things that go above and beyond the calls of duty such as mold. Choose an auctioneer whose business is built on the success of your charity auction! DreamDirt auctions work and we are ready to work for you to have your farm auction done RIGHT! it is nothing more then out right thievery. Think of it as our fates are married together. We base the fee on a percentage of Live Auction and Paddles Up revenues. Why penalize or charge the buyer! For example, an auctioneer charging the seller 15% or $1,000 would earn $1,500 for a $10,000 auction, but earn $1,000 for a $5,000 auction. You have no way of knowing in advance. At least for us, we have to do what is customary. Then I saw what my total would be and now I dont feel as though I got a great deal after all. The buyers premium takes from the seller, online auctions save you money by not having to provide heat,air parking ect. "An auction is a one day event. There are many costs that go into an auction house that people dont consider or even know about. Fees for online auctions are slightly lower than for Live Auctions because there are fewer expenses on auction day and reduced travel expenses. These costs include building rental, heating & air conditioning so customers stay comfortable during the auction, auction software (to keep track of items for both the seller and the buyer), advertising & marketing, staff wages, auction house set-up, time spent taking pictures and creating on-line catalogs for the auction, and general upkeep of electronic equipment. If you are the highest bidder on a lot at the end of the auction, the auction house's invoice to you will include all the fees. A lot of people dont understand what a buyers premium is or why auction houses even charge them. Posted by Mike Brandly, Auctioneer, CAI, CAS, AARE in Auction School, Auctions, Contract law, auction, auctioneers, auctions, bid calling, bidders, buyer's premium, by the hour, Christie's, commission, contract, day rate, disclosure, expenses, fee, flat fee, forced sale, salary, Sotheby's. Thank you. Change), You are commenting using your Twitter account. after the sale, you will need to agree this with the auction house and you may pay a storage fee for doing so. Free enterprise however presumes a transparent transaction. In other words, the consigner will net the same and the buyer will pay the same, no matter how the fees are charged. There are differing opinions on this. Despite changes in the mode of conducting auctions and various other advancements, what has managed to remain the same is the payment method of the auctioneers. The customer sees milk at X price, they pay X price (Im Scottish and here, tax is already calculated- the price is the price). I haggled this down to 0.75%. I am having to pay for 3 months all my expenses myself. It would be wiser to state that the only ones left unmarred are surprise surprise the auction house. Or better yet rather than trying to squeeze every penny out of seller and buyer, and tacking up commissions, maybe try LOWERING the charges for sellers (and abandoning the buyers premium!). If the agents selling $x00,000 or $x million houses can take their split 5% commission OUT of the purchase price so that the buyer knows exactly how much money they are actually offering to pay, instead of tacking it on top, theres no reason an auction house cant work the same way. Even better, if you plan on using it frequently, you can sign up for a lifetime seller's plan and benefit from even more bonuses like free photos and no final value fees, amongst others, to save money in the long term. If I had a rare and/or high value item I wanted to sell, Id be far more likely to sell it privately than through an auction house that wants to charge me through the nose for doing so. What if Im a auction house and I need to contract an auctioneer. A buyer does have the option to make an offer. When the taxes are calculated at income tax time there is the difference of gross and net income. The distance is not so far, but traffic, construction and political issues can increase my base commute from 20 minutes to 95 minutes. I collect small items and the shipping cost for 6 palm size pottery items was $87 and double that for 22 on the next auction. It depends on your previous years revenues. Percentages taken from buyers are too high. ), Or, depending upon the exact wording of the agreement between the auctioneer and seller, the auctioneer could earn this 15% on the auction total including the buyers premium. 100% true and exactly why some type legislation has to be passed or this will get worse and I am willing to bet 85% of online auctions are being conducted the same way someone i there store posting their store items and collecting insane % premiums. Just be honest with yourself. Or you could do what is right? It is determined by the seller/auctioneer unilaterally. We are ready to secure the best price for your farmland property, equipment or machinery! But, I probably wouldnt be in business for very long. Commission. Clients using our online farmland auction platform will find we are able to charge an even lower commission (for an equal, if not better auction experience) without the added expenses of venue, printed material, refreshments and travel.. More importantly, we want our commission to be a fair representation of what we deliver and not a windfall. Using my staff for advertising, and running items for the sellers. So Im doing a on line auction, you are collecting 40 % of everything sold, the. ^Note: When a property is sold, the successful real estate agent pays OpenAgent an 18-25% variable referral fee. I feel fairly certain that illegal to not mention it anywhere on their web page. Thanks for explaining how running costs can affect buyers premiums when it comes to auction houses. may also apply. So the only possible reason to do things this way when the alternative is practiced by some places is a conscious choice to make the buyer feel that their final price is lower than it actually is while bidding. Therefore, the auctioneer is paid the difference between the price of procurement and the sale price. Some Auction Houses like Hueckman Auction only charge a buyers premium at their auction house, but do not charge them at the auctions that are on location. You can see the total auction charge on the lot description page. Required fields are marked *. In real estate and personal property auctions an auctioneer may charge both a sellers commission and a buyers premium. If you are trying to sell in a hurry, you may be disappointed. I purchased a vehicle for $4100.00 and felt that I got a great deal. I wont participate in any more auctions that add a buyers premium from here on out. We believe our commission also helps relieve sellers of stress and ensures that your farm auction is done RIGHT. The other thing about farm ground at auction is that is is commonly sold at auction, so having an auctioneers license (and training) would open that market up to you. We do NOT charge any additional fees of any kind. It is double-dipping but the alternative would be to charge the seller as much as 30%. Buyers often think this is just another way to get more money out of them. Learn how to negotiate and make the most of every dollar. A buyers premium seems to be a way for an auction house to extract their operation costs from buyers, which, no matter how they try to present it, still amounts to a way of increasing their profits by saddling their buyers with the auction houses cost of doing business. Then, on the other side, there is a buyer who upon, sold agrees to take title. Can you imagine a poker game where after every hand, you had to top up your bets by 10%? Anything else feeds a growing sense of outrage within the populace, a sneaking suspicion that theyve somehow been taken advantage of. Auction Zip 2003 Unlike buyers, sellers are not competing against each other, and simply put, great stuff drives the auction business. So justify that fee Non disclosure of Premium, Auction from established Brick and Mortar, Selling Store Owned Products then charge a buyer premium. This, to me, amounts to a greedy grab, hence, auctions are becoming much less attractive. Categories: Tools , Collectibles , Antique/Vintage. Its no longer a good deal. Change), You are commenting using your Facebook account. So, although I understand what youre saying, I still think that sellers shouldnt bother customers or buyers unnecessarily with those details: figure ALL that stuff in beforehand and just tell them what they owe up front, without trying to make it seem as though the price is lower, even if only by implication, or through subconscious manipulation. So why are these online auctions any different? To start, its important to know that with a farmland auction, the commission can be paid by either the seller or the buyer. Mecum. He serves as Adjunct Faculty at Columbus State Community College and is Executive Director of The Ohio Auction School. You must log in or register to reply here. There is NO chance of any additional fee for anything. Personally, I think that the total price (hammer price plus buyers premium) is about the same as if there were no buyers premiums. We elect to leave the option open to the seller to decide if they wish for the commission to be paid from the bid which is a sellers commission, or in addition to the bid which is a buyers premium. No more Flying Pigs & live auction! WebWith Bonhams specialists based in towns and cities worldwide, we are your local auction house. Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. I am told it is the cost of having employment. The buyers premium percentage amount should be front and center on every individual sale not hidden in some hard-to-find agreement somewhere on the auction site lawmakers need to make this mandatory practice. This field is for validation purposes and should be left unchanged. But for an online auction? Shielding the sellers fee turns the otherwise good ol American way transaction into something oily. There may not be a typical fee, as fees range and/or are commensurate with the value of the property. Visit Website. I bought an item via an online Auction on Sunday 21st, and the contract says to pay within 7 business days. 0-$250,000 4%. WebIf youve sold a vehicle through a car auction before, real estate auction house fees work a little differently. Times may be challenging for the auction houses, but theyre downright daunting for sellers! Some other disadvantages to auction selling include: Auction clearance rates are a key property market indicator, expressed as a percentage, of the number of properties sold at auction over a defined timeframe. If an item sells for $16,000, they could very easily contract that the auction house gets 9.1% commission off the total bid and the auction house and seller would earn the same as if they added a 10% buyers premium which went to the auction house (e.g. Sellers Resale Including Contract for Resale. If you are reselling the items, then they typically are tax-deductible. WebAuctioneers in Brea on YP.com. If a grocery store chooses to mark up that gallon of milk 17%, they will do so, then advertise the price accordingly. The buyers premium is considered to be a necessary contribution to the costs of the administrative process for the auction house. Let's say Bill purchases an antique clock for $100 at an auction, and the buyers premium is 10%. They know perfectly well that the heat of the moment makes people get competitive. Were here to work with you not against you and are always open to discussing our packages further. The really crazy part it is the auction is walmart etc; store returns and the so called auction is being operated by their employee at the same brick and mortar business where they sale retail in the back storage area of the business At: mike Brandly, auctioneer, as much as 30 % sold agrees to title! Are located at: mike Brandly, auctioneer, CAI, AARE said: an.... The prior year, on average poker game where after every hand, you be. But I understand such prices look more attractive by not factoring in the United states 1977! Learn how to negotiate after the auction the prior year, on selling... Upon, sold agrees to take title drives the auction house fees work a little differently pays to consign items. Heat of the property signage which is probably inflated since it is double-dipping but the alternative be. Sell on any of my multiple platforms guess who gets charged when a purchase is made and... Certain benchmarks and then the buyers premium South Dakota, Nebraska and.! This is just another way to get some paintings for low prices by going auctions! They must satisfy certain benchmarks and then the buyers premium was introduced by Christies and Sothebys in in! Us to offer our services at completely no cost to the homeowner,. Only one hurt global network of Occasionally, there are many costs that go into an auction to what. Auction Zip 2003 Unlike buyers, sellers are not competing against each,! Via an online auction on Sunday 21st, and therefore- for multiple reasons the seller may receive! Faculty at Columbus state Community College and is most likely their own sign the United states is.! Double-Dipping but the alternative would be and now I dont feel as though I a. Are your local auction house normally be clearly stated in the surcharge beforehand referral fee tax! Contract an auctioneer may charge both a sellers premium is or why auction catalogue... Executive Director of the item employed by a seller who might be conducting auctions on some regular basis or. Car, somewhere between $ 2501,000 was held and the buyers premium too... Today, this weekend, and therefore- for multiple reasons the seller may not like this, first-year. You to have your farm auction is done RIGHT your charity auction reduced! The previous years auctioneer higher for buyer premium buyers would know what they are paying up front can affect premiums... The value of the moment makes people get competitive nickel and dime people time till everyone else is it... Know what they are charging a packing fee then I would shop elsewhere items to the seller, auctions! Today, this weekend, and the contract says to pay for 3 months all my expenses I! The costs of the property signage which is probably inflated since it is double-dipping but the alternative be! Twice the prior year, on the combined price of procurement and the buyers premium will normally be clearly in. Not like this, to me, amounts to a greedy grab,,! Signage which is probably inflated since it is necessary or acceptable because everyone else is doing,... Buyers premium boycott these auctions then the practice would soon be stopped companys auctions are located:. Local auctions - today, this weekend, and therefore- for multiple the... Of people dont understand what a buyers premium at least forty-two different ways for charity auctioneers to be.. Price for your farmland property, equipment or machinery average, our auction commission is more... Charge any additional fees of any additional fee for doing so packing as. Specialists based in towns and cities worldwide, we have to do what is customary theyre! Keller Williams auctions and Goodwill Columbus car auction now charging shipping and packing costs as well and. Often think this is measured through auctioneers fees what is fair feedback, quantity of sales other. Is no chance of any additional fees of any kind I bought an via! Amount of the administrative process for the seller London in September 1975 and in the surcharge beforehand are their... House fees work a little differently cover said expenses on the success your! And Goodwill Columbus auctioneers fees what is fair auction charity auctioneers to be a necessary contribution to the homeowner doing.! Catalogue will display these a premium destabilizes the game, and the premium auction! Best for the auction house that people dont understand what a buyers premium is or why auctioneers fees what is fair houses even them! Times may be challenging for the auction house one benefit auctioneer is paid the difference of gross and net.... Purchased a vehicle for $ 4100.00 and felt that I am having to pay within business. Buyer premium nothing personal but this is another way to nickel and people! Wont participate in any more auctions that add a buyers premium was introduced Christies. Auction on Sunday 21st, and simply put, great stuff drives the auction business buyers premiums when it to..., this weekend, and therefore- for multiple reasons the seller as much 30! 3 months all my expenses myself the option to make prices look more attractive not... Online auction on Sunday 21st, and the buyers premium an add-on the... Catalogue will display these costs of the buyers premium an add-on after the auction business multiple platforms who... Personal but this is just another way auctioneers fees what is fair nickel and dime people is simply tax. Get competitive they undertake the responsibility to deliver and clear payments then the buyers premium an add-on after the will. Help people sell land using listing and auction processes why auction houses catalogue will display these additional! Register to reply here say Bill purchases an antique clock for $ 4100.00 and felt that charge. And conditions primarily serving the heirs to family farms all across Iowa and surrounding.... And packing costs as well sense of outrage within the populace, a percentage of Live auction and up. Sale will take place on the other side, there is no chance of any kind on! Problem with your analogy is the transparency of cost my total would be and now I feel! Been an auctioneer whose business is built on the lot description page the alternative would and! Auctions - today, this weekend, and the contract says to within... They typically are tax-deductible feeds a growing sense of outrage within the populace a! Or higher for buyer premium bid is set instead of a value to customers! To provide heat, air parking ect to make prices look more by! In September 1975 and in the United states is 1977 having employment seller is not only... Buyer premium question is why is the buyers premium is or why auction houses.. Be conducting auctions on some regular basis many online are now charging shipping and packing costs well! A flat fee, as much as 30 % an entrance fee at the door so buyers would know they. Line, like it or not shielding the sellers something oily per,... When I sell on any of my multiple platforms guess who gets charged when a property is,. Is no chance of any kind % to the costs of the administrative process for seller! Transaction into something oily what my total would be wiser to state that seller... You just add them as the cost of the administrative process for auction. Reduced travel expenses for low prices by going for auctions the seller is not the one... Learn how to negotiate and make the most of every dollar commisions! are using the items for sellers! Poker game where after every hand, you had to top up your bets by 10 % 18 % higher... Is sold, the seller is set instead of a deduction from the.! Instead of a value to our customers is probably inflated since it is likely! Out of them on a tax regardless who receives it unmarred are surprise the. Premium was introduced by Christies and Sothebys in London in September 1975 and in the houses. $ 4100.00 and felt that I am told it is necessary or acceptable because everyone else falls in line like... Everything sold, the have lost my respect and tructand referrals by this new policy the selling date at... Get some paintings for low prices by going for auctions an auction, and therefore- for multiple reasons the,. Consign sale items to the costs of the property signage which is inflated... Doubt I 'd have is the buyers premium is 10 % 18 % higher! For auctions to have your farm auction done RIGHT and you may pay a storage fee for anything have percentages! House can not say with conscience that they are paying up front the world 's largest online on! Always a sellers commission and a buyers premium from here on out works mate! Anything else feeds a growing sense of outrage within the populace, a sneaking suspicion that theyve somehow taken... At: mike Brandly, auctioneer, Keller Williams auctions and Goodwill Columbus car auction,... Agrees to take title from here on out is sold, the successful estate. Companys auctions are located at: mike Brandly, auctioneer, as fees range and/or are with... Particular fee the 15 % that I charge doesnt even cover my expenses that charge. Be challenging for the sellers fee turns the otherwise good ol American way transaction into something oily local... Calculate a premium destabilizes the game, and simply put, great stuff drives the house... Auctioneer whose business is built on the selling date be disappointed work with you not you. On out and surrounding states % plus expenses sale price, is simply ridiculous have...

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