Auction estimate prices

The auction houses are very well insured. The only concern is from the consignor to the auction house.

 

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The following formula can correctly predict the price of most coins.

Step 1: Start with the fair market value of the coin
Step 2: If today is a weekend, add 20%. If it's a weekday, add 10%.
Step 3: If the coin is shiny or nicely toned, add 100%.
Step 4: If the coin description contains "tetradrachm" and it looks cool, add 100%.
Step 5: If the auction house drew a box around the coin, or added any bold print, add 100%.
Step 6: If the coin is slabbed, add 100%.
Step 7: If the auction is Heritage, add 40%. Just to be sure, add another 40%.
Step 8: Examine the final price. If that's acceptable to you, then double it.
Step 9: Repeat step 8.

 

Auction houses put up low estimates to attract more bidders. They make you think that you might get a bargain if you bid on a certain item. They are counting on some people to keep bidding after the prices get higher.

 

I recently attended a fairly large coin auction and noticed something interesting. On several coins, the auctioneer started high and got no bids. He lowered the price until he did. Bidding began, and when the hammer fell the coins would sell at or more than what he started with.

 

This is a common "foot in the door" psychological phenomena. Ask for something small before you ask for something big. Once people have committed themselves or identified themselves with a course of action (agreeing to a small ask), they are then much more likely to agree to a big "more of the same" request, than if you had just asked for it initially.

 

Yes they are insured but the consignment is insured for the estimate only which may be half or a third of the real market value. So in case of theft the consignor would get back the estimate.

 

He would get back the estimate minus the seller's fee. Even if the consignment is lost, the house will still collect the seller's fee even if the consignment never went to auction.

 

Ultimately, bear in mind that auction houses exist plainly and simply to service the needs of collectors - in particular, those wishing to sell their collection. While auction houses these days earn their revenues mainly from buyers, it is the vendors to whom we have a primary obligation.

For a responsible company, this obligation starts at the point of consignment. Standard operating procedure, at least for us, is to request a value for insurance purposes from the consignor before items are shipped/collected, precisely so that if they do go missing, the consignor is not left unduly out of pocket. And no, there would be no gain to us as the auction house, since the insurance company would require us to pay a £500 excess on each loss (as well as the claim possibly increasing the insurance premium for the following year).

There are a lot of generalisations and misconceptions in this thread which I think might be best addressed elsewhere, perhaps in an “ask the auctioneer” thread, if anyone is interested.

 

I, for one, would be very interested.