Heritage Auctions
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Heritage Auctions For Trusts and Estates Advisors Journal THIRD ISSUE // 2015 DEMYSTIFYING THE IN THIS AUCTION PROCESS ISSUE: BY MARK PRENDERGAST We addressed the auction process house has handled in the past. The 1 a few years ago in an issue of this larger auction houses usually have many Demystifying the Auction Process publication, but how the overall auction different departments that handle a wide process works remains one of the variety of categories, although some 4 most commonly asked questions by categories are stronger than others. California Dreaming potential consignors or client advisors. For example, Heritage Auctions has 40 5 Depending on the timing of scheduled categories with market leading strengths Valuations in the Vault auctions and the type of material to be in rare coins, comics, sports memorabilia sold, it can take anywhere from a few and Illustration Art, but also solid 6 months to a year from initial assessment auctions in other areas of art, jewelry Beatles Blaschke Collection to final settlement. Each aspect of and wine. the auction process is important for 7 consignors to understand, and when Initial Assessment Estate of Rod McKuen broken down step by step, becomes The preliminary contact with an auction 8 much less of a daunting procedure. house will usually consist of a series of questions to the seller regarding the Bullion vs. Numismatic Find the Right Auction Venue type of property being considered for 9 Different auction houses have different sale. If it seems like something that might Nigel Russel specialties and strengths in various be of interest to the auction house, categories of material. Finding the right the auction house will usually request 10 venue for your property can be one of an inventory, emailed images and any All About Appraisals the most important steps in ultimately further supporting documentation or 11 achieving the highest prices. Start by provenance from the seller. From this Mickey Mantle asking questions regarding the type information, the auction specialist will of items, quantity and value levels of either provide specific auction estimates, 12 items similar to yours that the auction an overall insurance value or suggest Luxury Real Estate 13 ANA Chicago Results Designer jewelry is featured in 14 Heritage’s September 28th Auction in Upcoming Auctions Beverly Hills, including this Burmese Sapphire ring designed by Oscar 15 Heyman estimated at $70,000 to Heritage Sponsored Events $90,000 and these beautiful Chanel Need an Interesting Speaker? earrings at $35,000 to $45,000. CONT. ON PAGE 2 an in-person visit or walkthrough. For consignors, Heritage Auctions does not charges for the insurance coverage, smaller collectible items and coins, once charge these extraneous fees - including consignors should expect that their an overall insurance value is established, insurance. property will be covered for specified it is common practice to send the amounts as a whole collection or as property in for review and inspection – Special Financing itemized pieces throughout the auction of course insured at the auction house’s Based on the value of the consignment, process. expense. If the property is determined the number of items and the type of by the auction house not to be of property, some auction houses may Cataloging interest to them, they may often suggest offer special financing options such as Once property is received by the another auction house, an online auction advances or guarantees. As the auction auction house, it goes through inventory or non-auction market that might be process can take upwards of 6 months control, photography and cataloging. more appropriate. or more in some instances, an advance The cataloging is comprised of detailed against sale proceeds can be very written description, condition grading, The Auction Estimate helpful to consignors who need the expert scrutiny, authentication and Next, the auction house will establish immediate access to funds for paying marketing. Images of the lots together an auction estimate on the items in taxes or other expenses. Heritage with the description are presented to question. The auction estimate is the Auctions has standardized the practice the market through print and online range of value that a piece is expected of offering advances with 1% per month catalogs, which are usually made to sell for at auction. Trusting the simple interest. Guarantees are less available to potential bidders about a expertise of the auction house in setting common and refer to an auction house month prior to the date of the auction. agreeing to pay the consignor a specific the estimate is advisable. The nuances of A very important aspect of preparing amount for a single item or collection – the specific items in question, the current for the auction is widespread and even if not sold for that much at auction. market conditions and past auction targeted marketing. Ask your chosen records are all considered in establishing Shipping and Insurance auction house what their plan is for the auction estimate. If estimates are attracting bidders to their auctions. Unless negotiated in the terms of sale, pushed too high, buyers are turned away Heritage spends over $15 million per the cost of shipping an item to the from even getting involved in bidding year on marketing its auctions using auction house is usually paid by the at the auction. Realistic yet conservative national/international print publications, consignor. At Heritage, we often arrange estimates prove time and time again to online advertising, extensive media packing and shipping for the consignor, be attractive to bidders, allowing for the distributions and direct mailings to make with the cost initially absorbed by us most competition and the highest final all potentially interested buyers aware and then deducted from the proceeds sale price. of the items offered in each upcoming of the sale. Insurance costs are usually auction. Terms of Sale negotiable - at Heritage insurance is The consignor selling through auction included as part of the seller’s fee. will pay the auction house an agreed Whether or not the auction house upon seller’s fee or commission. The percentages vary from house to house, region to region and even category of material. In general, a higher value consignment will have a lower seller’s commission, subject to standardized rates or negotiations. The standard rate for seller’s fee at Heritage Auctions varies by category– for example Coins is 15%, Fine Art is 20%, Rare Books is 12- 25% and Wine is 10%. Many auction houses charge additional fees for photography, marketing, and insurance. These fees may only be a percentage or two of the sale price or a set dollar amount per lot, but can add up significantly when dealing with a collection or estate containing hundreds of individual lots. To simplify terms for 2 THIRD ISSUE // 2015 Open for Bidding or handheld device as the preferable fees and expenses should be expected to When the auction catalog comes out method. HERITAGElive!®, Heritage’s own be received with the payment. Payment is in print or online form, some auction platform for internet bidding, provides most often by check, but can be arranged houses will allow advance bidding. This live streaming video of the auctioneer for delivery by wire or bank transfer. permits bidders to enter a bid prior to the creating an interactive experience for When a lot at auction fails to receive auction which will then be executed by bidders from the comfort of their home bids up to the pre-established reserve the auctioneer on their behalf during the or office. price, the lot will go unsold. Unsold lots actual auction. Heritage allows advance Sold! are then either returned to the consignor competitive bidding on all its auction or reoffered in a subsequent auction, The highest bidder and the bid amount is lots a few weeks prior to the auction date usually with a revised auction estimate recorded by the auctioneer and the legal through its website HA.com. and reserve price – reflecting the levels title of ownership of the lot is immediately of interest and bidding from the previous The Auction transferred to the buyer. Buyers are offering. Many auction houses charge The auction begins at the designated generally required to make payment for a fee as a percentage of the reserve for time and location as set forth by their winning bids within 7 days of the unsold lots. Be sure to identify this ‘buy the auction house and publicized in auction but the property is not released back’ or ‘buy-in’ as you negotiate the the auction catalog and online. The to the buyer until full payment has been seller’s fees for your consignment. At auctioneer will call for bids on each lot, received. Heritage, such a fee is waived for lots beginning with a pre-established starting Buyer’s pay the auction house a buyer’s offered without reserve. bid at some point below the low auction premium for each purchased lot which Selling valuables and collectibles through estimate and continue to take competitive is a percentage of the winning bid, or auction may be the most viable and bids at specific dollar increments until “hammer price”. Often sale results are timely method for reaching the widest there is an uncontested high bidder. At publicized and listed inclusive of the audience and achieving the best possible Heritage Auctions, the starting bid is buyer’s premium – which should be taken sale prices. Knowing a definite sale clearly noted in the print or online catalog into account when researching auction date and expected sale estimates are and is often the reserve price – meaning records for sale prices. See Meredith strong arguments for trusting the auction that any bid accepted during the auction Meuwly’s article “All about Appraisals” process in selling valuables.