I've been signing up and bidding with bunches of different auction houses in the last few months. Admittedly, I rarely read all the fine print-- I just check to see the fees, methods of payment, etc. While signing up with Spink today I read through their Terms & Conditions pages a little more closely. Hmm. If I'm understanding this correctly... (a) I can submit my maximum bid in writing (absentee or commission bid) and they will execute it as best they can (nothing unusual about that) (b) They can also, as a company, bid on any lots they want. ??? Is (b) standard operating procedure for auction houses? Seems like a conflict of interest. If a client submits an absentee bid well in excess of the minimum and the bidding is slow, what's to stop the company from bidding it up? Under what circumstances would they bid on lots in their own auctions? If there were no other bidders? That might be OK. Otherwise, hmmm. Seems problematic. Or is this much ado about nothing? I guess if the bidders are known/named it might not be a problem. Those of you experienced in dealing with major auction houses, can you shed some light on this for me from a real world standpoint? And what does section 4.10.1 mean? It looks like if Spink bids up to the reserve on the Seller's behalf, the Seller has to buy back his/her own consigned lot at the reserve price. Surely I'm not reading that correctly. Not that I really need to understand that section since I'm not consigning anything. Just curious.
Yes, it is common and has been done for many years. The bidding arm of the auction house is not to know the maximum bids of their clients and, typically, the bidding arm may bid only one time per lot in an effort to obtain the lot for inventory.
Keep reading there are other standard terms in the auction house contracts that most people never pay attention to. One of my favorites which is in just about everyone's terms is that if the coin has been certified by a TPG it is not returnable for any reason.
Wow. That sounds like too much temptation for the auction houses not to "cook the books", so to speak. You can't tell me that doesn't happen...I mean how big are some of these "auction houses" really? It could very well be just two people sitting in a room together, one them running the "bidding-arm only". ...And they won't talk to each other? No way. Never happens. Not in a million years, I'm sure(!) It sounds kinda like how five banks in London (ever since 1919) meet every business day to fix the price of gold. And those with "inside knowledge" get to reap the profits: "The process, during which gold is bought and sold, can take from a few minutes to more than an hour. The participants [in the banks] also can trade the metal and its derivatives on the spot market and exchanges during the calls. Just after the fixing begins, trading erupts in gold derivatives, according to research published in September. Four traders interviewed by Bloomberg News said that’s because dealers and their clients are using information from the talks to bet on the outcome." “Traders involved in this price-determining process have knowledge which, even for a short time, is superior to other people’s knowledge.” From: http://www.bloomberg.com/news/2013-...scrutiny-amid-knowledge-tied-to-eruption.html
Honestly, your reaction is common among those who have no, or very limited, experience with respected auction houses. The respect and trust they, the auction houses, are given has been earned the hard way, often over many decades. And that trust and respect is well deserved. Were it not well deserved they wouldn't be in business very long. That said, yes there are those out there who call themselves auction houses that you should not be dealing with. It's just like anything else in life, if you don't do your homework you're going to get burned.
Lots of folks have been spoiled by eBay and their "shill" bidding policies. But, since eBay is all electronic and, for all intents and purposes, anonymous, I can understand them enforcing their policies. However, as Doug stated, reputable auction firms DO have their reputations at stake and as such they spell out what they can and cannot do thereby notifying perspective bidders and consigners. Without consigners, an auction firm would suffer and without bidders, the business will only fail.
The auction house I cited in the OP is certainly reputable and reading the policy did not make me shy away from bidding. I was just curious to see how this policy is implemented. Thanks, Tom B, for the real world explanation.
We all want what you say here to be true. Indeed, I am of limited experience with auction houses: I have put in bids before at such an establishment, and have always been outbid. I mostly stick with their "buy it now" green sheets.
