I deal with a lot of auction houses for both buying and selling antiques and collectibles. I get asked a lot of questions about reserves. In this article I will answer many of these questions.
Auction Reserve Q & A
Should I put a reserve on my items?
This really depends on what you are selling.
Common Antiques and Collectibles:
When selling common items it is not recommended to place a reserve on these items. Reserves can make it so buyers lose interest in an item (especially common (high supply low demand) items).
Note: Most auction houses will not let you place reserves on common items or there will be what is called a buy back fee (they will charge you a fee if the item does not sell see: What is a “Buy Back Fee”? for more information ).
Rare Antiques and Collectibles:
With rare antiques and collectibles it can be a good idea to use a reserve. However this can also cause a loss of interest in an item.
Note: The auctioneer has the ability to pass an auction lot if they feel it has not reached the value it should, even if there is no reserve (any good auction house will do this).
How much should my reserve be?
An auction reserve is usually set at 25 -75% of the estimate value.
Example: The estimated value of a painting is $10,000 (USD) the reserve would be $2,500 – $7,500 (USD).
Is there a fee for using a reserve?
This depends on the auction house. If you are selling a high end item then there is usually no fee. However if you want to place a reserve on an item that should not have one, many auction houses will charge a fee or a buy back charge (if the item does not sell).
What is a “Buy Back Fee”?
This is a fee that is charged when the auction house has to “buy back” (unsold) items. They charge this fee to cover the cost of re-listing and advertising the item. There is a lot of work and cost that goes into setting up, advertising and cataloging an auction. When your item is unsold this process has to be done again at a loss to the auction house.
What happens if the item does not meet the reserve?
Each auction house has its own polices on what happens when an item is unsold. Here are some of the more common polices.
- The item is put into the next appropriate auction with no reserve price.
- The item is returned to you.
- The item is auctioned again with a lower reserve.
Why should I use a reserve?
Reserves are best used for rare items that you want to protect. With auctions there are many factors that can effect how much an item sells for.
Here are some of the factors that can effect an auction.
- Who is bidding (are the bidders there).
- Is it a specialty auction
- Supply and Demand
- Time of year
With so many factors it can be a good idea to have a little security in place, incase everything does not fall into place perfectly.
What is the difference between a reserve and blind reserve?
Reserve: A reserve is a published reserve (usually stated in the catalog along with the estimate price). This means the bidders know the reserve while bidding.
Blind Reserve: A blind reserve is an unpublished reserve price. This means only the seller and auctioneer know the reserve price.
Will a reserve make my item sale price higher or lower?
Reserves can turn off buyers especially if it is a blind reserve. However a reserve usually does not affect the amount of money an item sells for. It affects if the item sold or unsold.
More Information About Reserves
Reserves are meant to protect an item of from selling under its estimated value.
Remember when deciding if you want to place a reserve on an item to be realistic. Credible auctioneers will give you honest advice about reserves.
Sometimes it is hard to see the real value of an item as it has great sentimental value to you. Unfortunately sentimental value has no affect on market value.
If you have any questions or comment on auction reserves, feel free to leave a comment below.