auction, Auction Law, auctioneer, auctioneers, auctions, bidders, buyer's premium, charge, commission, contract, surcharge
Auctioneers who charge a buyer’s premium are being told they shouldn’t be charging a buyer’s premium. Maybe auctioneers who solely charge the seller should be told they shouldn’t be charging only the seller?
For that matter, there are auctioneers who charge both a seller commission and a buyer’s premium. That’s fine as well, as auctioneers can charge whoever and whatever they want — with client knowledge and consent.
The problem isn’t that we auctioneers can charge whatever and whoever, but that [particularly] regarding the buyer’s premium, auctioneers are telling other auctioneers they shouldn’t charge it. So who and what you charge is fine, but who and what I charge is not?
As we’ve repeatedly noted, buyer’s premiums have been used in the United States since 1977. It’s nothing new, it’s not unethical, not illegal, not improper, not illicit, not a disservice — not anything other than simply a surcharge to the auction buyer.
If that’s not okay, then maybe auctioneers shouldn’t charge the buyer for parking, coffee, food, catalogs, sales tax, merchandise … maybe buyers shouldn’t have to even pay for their purchases?
The use of the buyer’s premium has brought more property to auction, as this can allow a lesser direct charge to the seller. For example, a seller might likely prefer a 15% seller commission and 15% buyer’s premium over a sole 30% seller charge.
I’m on record encouraging auctioneers to charge enough to cover expenses and make a profit — and to evaluate the market to determine their fee structure. I’m not on record, however, telling auctioneers to not charge their clients in a certain fashion.
A philosophy we’ve used (and seen used otherwise) is “If nobody is complaining about your fees” maybe you’re not charging enough? We’ve done just that — only to receive criticism from — not clients — but fellow auctioneers. Why is that? Maybe because they aren’t charging …?
Incidentally, no auction bidder is forced to do so. Bidders bid voluntarily and when equipped with a complete disclosure of the terms and conditions including any buyer’s premiums, they choose to bid or not bid.
By the way, for those who think the auctioneer can make a bidder bid a certain amount, we explored that complete nonsense here: https://mikebrandlyauctioneer.wordpress.com/2023/01/26/apparently-little-known-bid-calling-basics/.
For that matter, outside of literally “forced sales” no auctioneer can force a seller to engage your services. Sellers must agree to hire you and bidders must agree to bid. With knowledge and consent, sellers engage auctioneers and bidders earn the right to bid.
For us personally and countless other auctioneers, we’ll continue to charge both the seller and buyer, only the seller, and only the buyer and it’s entirely our (auctioneer/seller) decision — not yours. You are free to do the same, and even charge a buyer’s premium if you and your client desire.
Mike Brandly, Auctioneer, CAI, CAS, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at Mike Brandly, Auctioneer, Brandly Real Estate & Auction, and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, and an Instructor at the National Auctioneers Association’s Designation Academy and Western College of Auctioneering. He has served as faculty at the Certified Auctioneers Institute held at Indiana University and is approved by The Supreme Court of Ohio for attorney education.
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