PROBATE GUIDE: SELLING AT AUCTION
Selling at auction: the true cost to your client
Auction houses provide a useful service. But at what cost?
New Advertising Standards Authority guidelines stipulate that the total commission (including VAT) payable by the buyer must be clearly explained in any printed literature.
However, if you are selling an estate at auction, are you aware of the level of commission an auction house deducts before sending on the final proceeds to you/your client?
True cost versus advertised cost
Both buyers and sellers at auction pay commission to the auction house.
Working with the average buyer’s premium of 24% [i], a buyer ends up having to pay £1,240 if their winning bid was £1,000.
If we work with the average vendor’s commission of 19.8% [ii] your client will only receive back £802 for an item the buyer had to pay £1,240 for.
Why are regional salerooms reluctant to advertise the true ‘realised prices’
Following a sale, auctioneers often publish the ‘realised price’ for each lot.
Only the top London salerooms publish the figure including the buyer’s premium.
Regional salerooms only publish the hammer price. This is often interpreted as a way of disguising the large difference between what the buyer paid and what the seller received.
How to get the best deal for your client?
It is not wise to simply choose the auction house with the lowest charges.
The best way in which to offset the cost is to choose the auction house that is best placed to sell the item.
For instance, London salerooms charge a significantly higher percentage than provincial salerooms. However, a Chinese vase was sold two years ago at a Cheshire saleroom for £100,000. It was recently resold by Christies for over £600,000. Another saleroom in Yorkshire sold a Chinese vase for almost £3,000,000. This vase was resold by Sotheby’s for £6,000,000.
It pays to sell items at the right saleroom.
The benefits of diversification
If you approach a single saleroom with your client’s estate then they are very unlikely to provide you with unbiased advice. They will happily take the entire estate, leaving all of your client’s eggs in one basket.
Our approach is different. We are completely independent, and instead look at each item individually and consider the best possible way in which to sell it.
We often sell ordinary items of silver and gold privately, as their scrap value is normally higher than what could be achieved at auction, especially once the auction house has taken its cut.
There are items where it proves more lucrative to arrange a private sale directly with a buyer, which we can arrange, meaning that your client get a much better deal.
Finally, we take those items best suited to sale at auction and divide them up. The very best are sent to specialist auction houses across the country. Only then do we sell the remainder locally.
By considering the most suitable way of selling each item we can ensure the best possible return for your client.
Best of all this additional level of service does not cause any extra hassle for you. Once appointed we take over the entire process and simply provide cheques for you to pass on to your client.
How to get help
If you would like more information about our probate service please contact us on 01270 440357.
 The average buyers commission is 24% inclusive of VAT – see more here.
 The average sellers commission is 19.8% – 15% commission, 1.5% insurance + VAT – see more here.
 Accurate on the 17th July 2017
“Please allow me to commend Mark Littler to you for your probate and matrimonial division work. He is enthusiastic and professional and his experience in the auctioneering world will ensure that he appraises your items accurately and finds the right auction house or other outlet to sell your goods at the best possible price if they are to be sold.
Best of all he will deal with the complete clearance of a property and ensure that it is left clean and tidy to hand over to the personal representatives or an estate agent thereafter.”
Consultant at DWF