Judging from our mail, you're not alone if you want to take part in the auction world but have questions about how it works. Many folks marvel at friends' auction bargains but don't know how to get started. Some worry they'll wind up owning an expensive porcelain chamber pot by accidentally wiggling their nose at an auction. Others have households full of things -- or even one item -- they want to turn into cash but don't want to lose their shirt in the process.
This week we'll examine some of the ins and outs of buying at auction; on April 18, we'll focus on selling at auction. To assist you, we have a list of many general and specialist auction houses around the country, with addresses and phone numbers; for a free copy send a large (No. 10) self-addressed stamped envelope to: Solis-Cohen Auction List, P.O. Box 304, Flourtown, Pa. 19031-0304. And, don't forget to check the auction advertisements in your newspaper to find out about coming local sales.
The good news is auctions aren't just the province of smart dealers and experienced collectors with deep pockets: With just a little preparation you can learn to buy like the pros. The bad news is once the auction bug bites, your grass may grow unmowed or your laundry basket might overflow as you zoom from sale to sale and pore over auction catalogs for fun or profit.
All types of items are offered at auction, some in specialized sales, others in general ones. The majority of items sold at auction fetch under $2,000, according to auctioneer Karen M. Keane, managing director of Skinner Inc. in Bolton and Boston, Mass. "There's a lot of value for your money when you buy at auction. In many cases private collectors are bidding against dealers, so they're really buying at wholesale prices," she added. Even at Sotheby's and Christie's, the centuries-old international auction houses known for selling million-dollar masterpieces, more than half of what's sold typically brings less than $2,500. That doesn't mean everything's a bargain at auction: Prices can go through the roof when two bidders desperately want the same item.
Although bidders sometimes arrange to use surreptitious signals, a flick of a pen or a wink won't win the uninitiated an unwanted Chippendale chest. Most auctioneers require bidders to establish credit and register for a numbered card or paddle to raise for bidding in advance. Onlookers rarely are confused with active bidders. Consider attending an auction or two before bidding for the first time to get a feel for how things work.
Auctioneers at Sotheby's, Christie's and the major regional houses usually sell about 100 lots (single or grouped objects offered for sale) an hour in numerical order, offered in an illustrated catalog published before the sale. They generally speak clearly enough for even first-time auction-goers to follow the action. Some auctioneers at country antiques sales are easy to understand, but often their patter sounds as though they're used to selling livestock.
Catalogs generally are sold at the auction house and by mail; costs vary. Catalogs typically include the price range in which the auction house estimates each lot will sell, based on prior sales of comparable objects. These figures, called pre-sale estimates, are helpful to prospective bidders in determining how much they might have to spend to buy the lot, although sometimes the estimates prove to be too high or too low.
When something far exceeds its pre-sale estimate, it's usually because two collectors or dealers wanted it and engaged in a TC bidding war. It's best to decide how much you want to spend before bidding, so you bid with your head and not over it. Make sure you take into account any buyer's premium (explained below) and applicable sales tax.
At the auction each lot is announced by number and usually is described briefly. Auctioneers typically start the bidding at around one-third to one-half of the lot's low pre-sale estimate. Bids generally rise in 10-percent increments, with the auctioneer reserving the right to accept larger or smaller offers.
Items sold at auction frequently are subject to a "reserve," a confidential price below which an owner won't sell, generally around 60 percent of the low estimate. Reserves are negotiated between seller and auctioneer. Lots that don't meet their reserves at auction are described as being "bought-in" or "passed." Usually they're offered again at another auction (often with a lower reserve), sold privately or returned to the consignor.
Hammering the block
When a lot is sold, the auctioneer generally knocks down a hammer or gavel and says "sold," announcing the buyer's number and the winning bid, known as the "hammer price." At auctions in New York, a law requires the auctioneer to announce whether an item was sold or was bought-in. Sales results are published after the auction.