Railwayana items sold at auction..

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Mcr Warrior

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Suppose some item of railwayana was sold at auction, and the "hammer" price was £100 (this figure so as to keep any calculations relatively simple).

What overall amount might the buyer have to pay?

What net price might the seller expect to receive?

Presumably the difference, if any, will be the auctioneer's fees and maybe VAT as well.

Anyone able to advise?
 
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John Webb

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Most auction houses charge both sellers and buyers a 'premium' on top of which there is also VAT. Different auction houses charge different premiums, based on a percentage of the sale price, so if one is selling or buying something then it may be worth asking what a particular auction house will charge you. The TV programmes 'Flog It!' and 'Bargain Hunt' often mention the particular rates the auction houses they use will be charging.
 

Mcr Warrior

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So, how might the calculations work out, given typical fee rates, using the £100 hammer price example?
 

A Challenge

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Most auction houses charge both sellers and buyers a 'premium' on top of which there is also VAT. Different auction houses charge different premiums, based on a percentage of the sale price, so if one is selling or buying something then it may be worth asking what a particular auction house will charge you. The TV programmes 'Flog It!' and 'Bargain Hunt' often mention the particular rates the auction houses they use will be charging.
I had assumed that the payment amount was the hammer price, and that it was just that the seller didn't get all of this, though it sounds like I was wrong.
 

Titfield

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Its not quite a simple question to answer:
Some auction houses charge a buyers premium ( an amount the buyer pays on top of the hammer price) and some charge a sellers premium ( an amount deducted from the hammer price and kept by the auction house) and some charge both. There is VAT to pay on any premium paid.

The premiums are usually a % of the hammer price but for small value items often a flat fee is charged.

So taking the well know Matthewsons Auctioneers from Bangers and Cash and assuming the item is a piece of automobilia (as the nearest thing to railwayana)

Hammer Price is £100
Buyer pays 20% premium plus VAT = £100 + £20 + £4 = £124 NB The vat is only on the premium
Seller pays 20% premium plus VAT = £100 - £20 - £4 = £76 NB the vat is only on the premium
Matthewsons earn £40 (excluding the vat they pay the chancellor). No wonder they are always smiling.

It may be of interest to note that some auction houses charge an additional premium for online bidding!

Auction Houses are very quick to point out that they achieve "best prices for sellers". I am not so sure that is the case but I dont have anything to go on.,
 
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Mcr Warrior

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@Titfield . Thanks for that and confirming what I had been wondering, that some auctioneers are on double-bubble, effectively charging maybe 40% on items sold, split 50:50 between buyer and seller.
 

Merle Haggard

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Some Railwayana auctioneers - Great Central Railwayana Auctions, Great Western R. A. charge 15% (+ VAT = 17 1/2%) to both vendor and bidder and others (e.g. Talisman, G.N.R.A), 10% and, being smaller, don't charge VAT.
The advantage of selling through is that sometimes a very high price can be obtained, if there are two determined bidders. Equally, because auctions depend on there being more than one bidder and the market in some Railwayana interests is thin, there is nothing you can do (as a vendor) if your item is sold at a low price.

It's interesting that the auctioneers receive about 30% of the payment that the buyer makes.

Another method of buying and selling is the 'swapmeet' - down to one, at Quorn on the G.C., though suspended of course. Here, there's no premiums. Curiously, live auctions usually include traders' sales stands as well and it's not unusual to see an item auctioned that's also on sale at a lower price at one of these. But buying at auction you always get a better bargain....
 

Titfield

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The advantage of selling through is that sometimes a very high price can be obtained, if there are two determined bidders. Equally, because auctions depend on there being more than one bidder and the market in some Railwayana interests is thin, there is nothing you can do (as a vendor) if your item is sold at a low price.
You can of course set a reserve price ie the minimum offer you would accept.
 

Mojo

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It may be of interest to note that some auction houses charge an additional premium for online bidding!
I was going to say this as well.
We’ve bought a few (non railway) items from an auction house near my house. All sales are on-line at the minute through a third party website ukauctioneers.com. This website charges 3% on top of the hammer price as it’s fee, but they also do offer a flat fee option of £3.95 (£2.95 at some smaller auctions) for an unlimited number of lots for that auction only.
 

Mcr Warrior

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Indeed; but if it doesn't sell you still have to pay commission (based on reserve), and having a reserve doesn't alter the price in the room.
Just to clarify, if, as a prospective seller, one had put a £100 reserve price on a sale item, and it had only got to £50 in the sale room, and so didn't sell, you'd still have to pay the auctioneers a fee regardless? :s
 

Merle Haggard

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Just to clarify, if, as a prospective seller, one had put a £100 reserve price on a sale item, and it had only got to £50 in the sale room, and so didn't sell, you'd still have to pay the auctioneers a fee regardless? :s

That's my understanding of the conditions, yes. For some, every outcome is an opportunity.
The pandemic has meant that on-line sales are universal. Picking up 'won' items from auctioneers homes is an interesting experience:E
 

EbbwJunction1

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There's quite a few occasions on Bangers and Cash where the reserve price isn't met, and this is shown during the episodes.

What often happens then is one of two things:
The under bidder negotiates with the seller and buys the car for a lower fee that the reserve or
The car stays with Matthewsons until their next auction, when they try again. Sometimes it stays there for a while; I saw an episode recently where a car had been there for (I think) over a year!

I guess that if the latter is the case, the genial host Derek charges a storage fee - although nothing is said about that.
 
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