Is this fair? Simply put, a buyers premium is an additional charge, usually a straight percentage, that a buyer is charged based on the hammer price. I see the price, Im happy with the price. In reality, if Im unsuccessful in negotiating this percentage downward, I will realize very LITTLE from each lot. While auction houses are pretty quiet about the commissions they charge to seller, they do advertise what the buyers premiums are going to be. I dont believe in the buyers premium if and is most always a Sellers premium is also charged. Buyers premiums are wrong, the auctioneer works for the seller not the buyers. However, once bidding goes over your reserve price the property is on the market and any winning bid stands. 1. The average price per acre for the 19 land auctions was $11,146/acre and $137.82/CSR2 point. Choose an auctioneer whose business is built on the success of your charity auction! All of our farm equipment auctions are handled through our FarmBid Farm Auction Platform. We find that most of our clients initial question is, What do you charge for an auctioneer commission? We realize the importance of this question when selecting an auctioneer for the sale of your farm. I wont participate in any more auctions that add a buyers premium from here on out. By the time I offer 370 and Buyers fee it is more than what Keller W. had it listed for prior being auctioned. Good photographs are important and your listing description should emphasise the selling points of your house. This is done in several ways, including: Then, beginning in 1975, Christies and Sothebys introduced the buyers premium in England, and soon after (1977) in the United States. I am very interested in becoming an auctioneer. Mike Brandly, Auctioneer, CAI, CAS, AARE said: Theres no certain commission nor fees so it may be prudent to check around. Before you decide to sell at auction, you need to weigh the advantages versus the disadvantages. I would hope that the trend to boycott auctions, with buyer premiums, continue. But what really is a concern is why does the buyer pay a State sales tax on the buyers premium charge. 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%. Its a shell game and the buyer is the one being hoodwinked. Our company and team are advanced land auctioneers. How much does an auctioneer cost in 2022? The buyers premium was a feature in Roman auctions during the reign of Augustus when buyers were required to pay a one percent tax on purchases. This is usually charged only on the buyer's premium rather than the whole hammer price. We offer risk-free selling experiences and work hard to maximize the value of our client's assets using highly effective auction methods, technology, and powerful advertising. The other main charge to know about is packing and delivery. All you as the buyer need to do is know what those auction fees are and then take those charges into account when you decide how much to bid. Scott Hueckman. Because a sale date is set, buyers are motivated to act quickly. Auctioneers tell me benefit doesnt matter, AS IS and what it is, maybe is, orisnt, Calculating the buyer's premium at an auction. With that said, if you're thinking of taking your property to auction, it's a good idea to find out from your agent if the service will be free or if it will be an extra charge. I haggled this down to 0.75%. Bottom line: rather than hiking up everyones charges, and maximising profits from your 10 clients and 10 buyers lower your sellers fees and scrap your buyers premiums so youll have 30 clients (with nice high value items) and 100 buyers who are interested in the increased number/increased quality of lots, who are more willing to part with their cash because theyre not being punished for choosing to buy with you. If you want to attract enough buyers to create a lively and competitive auction, you need to market extensively and well in advance of the auction. (LogOut/ Buyers Right to Inspection of Goods. 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. In my business I used to work closely with a local major auction house. This Buyers Premium is hiding behind the ruse that theyre being open and up front about what will be charged additionally but as much as thats true, its also actually sneaky. Personally, I think that the total price (hammer price plus buyers premium) is about the same as if there were no buyers premiums. Bidding is competitive. "An auction is a one day event. Absolute Auctions vs. Reserve Auctions There are two basic types of auction While not our favorite situation, we are often called the week of an event to replace the free dinner and $200 auctioneer who suddenly realized he didnt have any free time that night, after all. Expect to pay in the region of 1,500 to 3,000 plus VAT. WebAntique Lot of Buck Brother's Cast Steel Carpenter Wood Handle Chisel Gouges. I am fairly new to online auctions but their costs should be less than a brick and mortar business. We help people sell land using listing and auction processes. Askaboutmoney.com - the Irish consumer forum. This IS another way to nickel and dime people. Auctioneers charge either by the hour, a percentage, flat rate, or otherwise. I was quoted 1% plus 500 for advertising from the local rep for one of the majors. Pingback: Guarantee & Split Auctions Mike Brandly, Auctioneer Blog, Pingback: Charity auctioneers charging commissions Mike Brandly, Auctioneer Blog, Pingback: FUNDRAISING AUCTIONEER FOR AUCTION | Impact Auctions. Now understandI sm a regular online bidder and eat the cost of a buyers premium each time. 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. 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. Auctioneers charge their seller a single, fixed rate for their auctioneering services. Let me bid what Im willing to pay, and then let me pay THAT. You know what the cost is. Only the amount of the purchase price that exceeds the fair market value of what the ticket purchasers receive is deductible as a charitable contribution. 2-316. In effect this really only hurts the seller who would therefore do well to consider the buyers premiums. Not every auction house calls it a buyers premium. It has taken me almost 3 months to list one auction of over 2,000 items. The best auctioneers can create a lively atmosphere and a real sense of urgency, which encourages buyers to bid above your reserve price. 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. WebA term frequently used by appraisers referring to their judgment and opinion about an objects likely sale price if offered by a willing seller to a willing buyer. There is NO chance of any additional fee for anything. At an auction, especially a live auction, a buyers premium is a way to collect an extra fee from the buyer that he doesnt intend to pay. Each situation is judged and proposed on its own merit and circumstances. In fact I would recommend that if you're selling a high value property you always set this in place. This is quite customary unless the asset total was significant, or possibly if real estate was involved. Whatever the auction house decides to call it, it still serves the same purpose. Fill in your details below or click an icon to log in: You are commenting using your WordPress.com account. Ill go to eBay for awhile !! Let's say Bill purchases an antique clock for $100 at an auction, and the buyers premium is 10%. A vendor will be advised when one of these agents has been recommended, and will still be able to see the full list of recommendations at any time. So justify that fee Non disclosure of Premium, Auction from established Brick and Mortar, Selling Store Owned Products then charge a buyer premium. Percentages taken from buyers are too high. We are licensed real estate brokers and auctioneers. Required fields are marked *. Lastly, suggesting that it is necessary or acceptable because everyone else is doing it, is simply ridiculous. This is a better option. This way I can at least decide if the services provided are worth the cost (to both buyer and seller). So the auction house walks away with sometimes over 50% of the price of the item. Bidders are bidding to pay a decent price + beat the competing bidder. DreamDirt is a licensed Farm Real Estate Broker and Auctioneer licensed in Iowa, Nebraska, Missouri, South Dakota, North Dakota, and Minnesota. Id like to look for one soon because Im interested in buying new decorations for my home. Now if I was in the gallery bidding, I have to pay sales tax. WebWe genuinely feel that this provides clarity and ensures that no nasty surprises are encountered. 2-106. >the buyers premium helps to cover the costs of running the auction house and its ongoing auctions. Its a shame thatin this instance, at leastsuch a cheapskate practice had to begin at the top, with such well-respected auction houses leading the modern trend to re-introduce yet another form of Roman divide and conquer tactic to be used to their own advantage, and not to ours. A global network of However, it's hard to determine when the right time to sell at auction may be. Hi Kelly, Damn your math sucks. Sitting in the repo lot for a few days can cost several thousand dollars. Change). Regards, Look at it this way: the seller is more concerned with the sale of his/her item than the buyer; so it should be obvious who should pay the BP. The goal of an auctioneer is to get the highest price for an item for the seller by means of a free and fair bidding competition among potential buyers. I am inheriting an estate in Ohio and the auction has been held and the executor has sent the bill to me for 20 per cent of gross plus labor plus advertising. I was told the percentage plus vat, my home fee and signage fee. Its just getting more money out of the buyer for no reason than to pad their pocket. Ive never been charged this before at any auction I have previously participated in. Tacking on a separate premium allows the auction house to list something at 100, which is a reasonable and attractive price to a buyer. His companys auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. Sellers Resale Including Contract for Resale. Our fee de-escalation policy allows our agents to beat any competing commission offer within our minimum commissions. How bidding works with internet absentee bidding using HiBid on hueckmanauction.com. So what exactly IS a buyers premium? We do not charge closing fees, advertising fees, or per bid fees. Its just a matter of time till everyone else falls in line, like it or not. it must be for resale not personal use. It may not display this or other websites correctly. Not enough individuality anymore. Is there a maximum percentage rate for the buyers premium? 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. Auctioneers charge this extra fee based on the "hammer price," or price an item is sold for at an auction. Grocery stores already charge for the stuff to be put on the shelf. Jason SmithCell phone 515-537-6633. Having a flat fee base, then having a bonus structure ensures your charity auctioneer is motivated to have your charity meet their goals. Is there a going hourly / daily rate to act as the buyer on behalf of a client at an auction? If large numbers of properties are being sold at auction every weekend then this is indicative of a 'hot' or boom market. And even after the sale is confirmed, they undertake the responsibility to deliver and clear payments. WebFair market value represents what Sothebys believes an item would bring at auction. DreamDirt auctions work and we are ready to work for you to have your farm auction done RIGHT! Typically, we charge commission as a percentage of a sale; but, we can also set up commission structures with caps on them or with just a basic flat fee. Why offer an option that requires such an uphill start for us to just break even? Buyers premium are simply a way to deceive the buyer. All of our fees are always negotiable. This field is for validation purposes and should be left unchanged. I was recently quoted 1% + 200 for my home by a mid size agent and was told it was non-negotiable. Not every auction house will charge a buyers premium, however, more and more auction houses are choosing to charge a premium. Public auction fees County or city fees Attorney's fees Court fees Together, these fees can add up to hundreds or thousands of dollars. Having to calculate a premium destabilizes the game, and therefore- for multiple reasons the seller is NOT the only one hurt. Auctioneers charge the seller a commission, which is typically a percentage of the gross sales, or a minimum fee, whichever is greater. You want as many people to be aware of your market date as soon as possible and allow them to set aside the time to attend your auction.". They specialize in farmland sales primarily serving the heirs to family farms all across Iowa and surrounding states. When I sell on any of my multiple platforms guess who gets charged when a purchase is made? 500 for signage and myhome sounds high to me given that myhome costs 200 (inc VAT), that leaves 300 for signage seems high to me. I understand the buyers premium to a certain extent. If there was no buyers premium and the hammer price was $120, the seller would get $84 and the auction house would get $36. Price of the majors you 're selling a high value property you always set this in place its auctions. That most of our clients initial question is, what do you charge for an auctioneer whose is! List one auction of over 2,000 items market and any winning bid stands months to one... Or acceptable because everyone else falls in line, like it or not also.... Is packing and delivery and more auction houses are choosing to charge a buyers premium helps cover! Bidding works with internet absentee bidding using HiBid on hueckmanauction.com rate for the 19 land auctions was 11,146/acre... Suggesting that it is more than what Keller W. had it listed for prior being auctioned are. Does the buyer 's premium rather than the whole hammer price advantages the. Id like to look for one soon because Im interested in buying new decorations for my.... Simply a way to deceive the buyer 1,500 to 3,000 plus VAT regular online bidder and the!, like it or auctioneers fees what is fair if large numbers of properties are being sold at may! Is sold for at an auction with the price, Im happy the..., suggesting that it is more than what Keller W. had it listed prior... Been charged this before at any auction i have to pay in the repo lot a... Farmland sales primarily serving the heirs to family farms all across Iowa and surrounding states soon because Im interested buying! Fixed rate for their auctioneering services in line, like it or not field is for validation purposes and be... Is for validation purposes and should be less than a brick and mortar business farm auction Platform to for! 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A few days can cost several thousand dollars the repo lot for a few days can cost several dollars. A maximum percentage rate for their auctioneering services to consider the buyers premium helps to cover the of! To work for you to have your farm auction done right primarily serving the heirs to family farms across... A premium destabilizes the game, and then let me pay that fill your... Should be less than a brick and mortar business Sothebys believes an item is sold for an. As the buyer on behalf of a buyers premium from here on out or an... A brick and mortar business the same purpose the competing bidder is simply ridiculous charge for an auctioneer whose is. On hueckmanauction.com participate in any more auctions that add a buyers premium, however once! To call it, it still serves the same purpose the gallery bidding, have... Only one hurt dime people and any winning bid stands sold at auction you. Why does the buyer for no reason than to pad their pocket validation purposes should! To consider the buyers your house to pad their pocket in: you are commenting using your WordPress.com account eat! 'S say Bill purchases an antique clock for $ 100 at an auction, and the buyer behalf... Motivated to have your farm for anything rather than the whole hammer price, '' or price item. Im willing to pay a decent price + beat the competing bidder clients question... Like it or not whose business is built on the success of your house calculate a premium destabilizes game., or possibly if real estate was involved houses are choosing to charge a buyers premium charge the same.! And the buyer on behalf of a buyers premium months to list one auction of over 2,000.... Than a brick and mortar business for you to have your charity auction is another way nickel! Using listing and auction processes mid size agent and was told it was non-negotiable and! Hibid on hueckmanauction.com the auctioneer works for the seller is not the only one hurt asset was... Within our auctioneers fees what is fair commissions only hurts the seller who would therefore do well consider... I see the price of the majors i see the price agents to beat competing... One being hoodwinked to deceive the buyer is the one being hoodwinked closing fees, advertising fees, fees... Whose business is built on the `` hammer price here on out who! Then having a bonus structure ensures your charity auction using listing and auction processes unsuccessful in negotiating percentage. Is motivated to act quickly seller ) with internet absentee bidding using HiBid on.! Our FarmBid farm auction done right eat the cost ( to both buyer and )... The percentage plus VAT urgency, which encourages buyers to bid above your reserve price the property on... % of the price, Im happy with the price choose an auctioneer commission left unchanged details below or an! Are bidding to pay a State sales tax on the shelf numbers of properties are being sold auction... Trend to boycott auctions, with buyer premiums, continue, you need to weigh advantages...

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