Since mid 2008 both Christie’s and Sotheby’s raised their buyer premium fees to 25% on the first $50,000. 20% is then levied on the amount beyond $50,000 up to $1 million. Any monies greater than $1 million are charged a 12% fee. This is a 5% increase on the first category of monies from earlier years.
If a buyer knows they have an add-on fee (the buyer premium) of in this case 25%, they will bid accordingly with that extra finger of money in mind. So in reality, an increase in what is added to each bid, can and frequently does affect what prospective buyers will actively bid. In plain English, an increase in the buyer fees really affects the seller’s bottom line too. The seller receives a portion of just what the buyer bids, not a % of the buyer’s bid plus the buyer’s premium.
Buy-in rates at large and small auction houses (the rate which items do not meet the minimum $ a seller will accept) have been increasing during the last 8 months.
These are important considerations when electing to sell property through an auction.
Corinne Cain at www.SavvyCollector.com
