Handling of Written Bids at Major Auction Houses

I wouldn't be discouraged. I am sure there are some auction houses out there who will engage in fraudulent behavior, but if you are bidding in the New York sales rest assured those houses are the most respected in the world for a good reason. I've been doing this for nearly 30 years without any troubles. Although, having said that, understand that the estimates for those auctions are usually low and many average lots will hammer for about double the estimate. If you are still worried, just look around for your coin at a fixed price.

 

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CNG estimates for their printed auctions don't mean @#$%. They consistently estimate lots to 1/3 or quarter of its realistic value. So much so that their total hammer value of an auction is always around 3X the total of estimates.

Not sure on HA, but they usually realize at least twice the pre auction estimates right?

 

uh-oh, Ardy ... those are fightin' words!!





I agree that the average of the hammer-price is usually 2 to 3 times the estimate ..... but every now and then, I seem to score an entry-level bid and steal it for 60% of the estimate (it really is a hit and miss at times, eh?)

Oh, and I seem to find life a bit more enjoyable when I trust people ... like that swell chap who sold me the Golden Gate bridge (sometimes you've got to throw caution to the wind and jump right in!!)

 

Low estimates and starting bids do two important things for the auction house. One, it is good for advertising and getting collectors to consign to their sales. They can approach a collector and show them sales results which seem fantastic. The other thing it does is encourage bidders. Many collectors may be scared off bidding by a high estimate. Why bid if they feel they have no chance? With a low start bid many more people can participate than otherwise.

Anyway, with live internet bidding now common practice, most people can still 'attend' the auction without leaving a mail bid.

 

It may not be a level playing field, but it also isn't fraud if the rules of the auction explicitly allow for consignors to bid on their own lots and/or for the auction house to bid in its own interest or in the consignor's interest (e.g. CNG, note esp. III.2.1). Always read the auction terms thoroughly. Buying at auction can provide good value if approached "eyes open". After all, many lots in the upcoming NYINC auctions will be sold to dealers who rightly expect to retail those same coins at a profit. I would suggest leaving a book bid no higher than you are comfortable paying (don't forget the buyer's fee).

 

who sets the reserve/starting price? Consignor or auction house? Or they negotiate to an agreement?

 

When the auction house bids on their own stuff or on behalf of the consignor, that is not fraud. I think it stinks and opens up a Pandoras box of unethical, although legal behavior built you are correct it is not fraud. However I never made that claim. I understood the distinction before I made my post.

What you point put is legal BUT this does not give license to the auction house to look at a maximum bid and then bid up to that amount, to inflate the bids. THAT is fraud. The employee bidding for the auction house should have no access to other customers max bid.

Nobody agreeing to CNG note esp III.2.1 expect that they are agreeing to what I am suggesting happens in many circumstances.

But please feel free to tip your hand to the auction house. Your money.

 

I understand this and in situations where I'm not represented or can't bid live, I'll submit the bids through Sixbid or directly with the auction house instead. You'll be fine to do the same with the the NY auctions IMHO. You are at a bidding disadvantage but you won't be defrauded.

Good luck!

 

All of the above. I normally let the auction house decide because I don't think it makes much difference. The market is the ultimate arbiter.

 

Often/usually the start/minimum bid is a set percentage of the estimate. If you are selling a coin estimated at more than its value, it might start above a level where anyone will bid so the coin goes unsold. If the lot starts low and ten people bid it up to twice what it is worth, the seller and house benefit. I see no reason anyone would want a coin to start high and not sell. If rules allow you to bid on/buy back your coin, you may have to pay a bit for the process but we seem to see more sales where people bid more than many of us consider wise on coins with problems than great bargains on great coins.