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Auction Buyers Premiums


Cdfarabaugh

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I'm curious (as others have been on this earth longer than me) as to just when, or how long ago auction buyers premiums became mainstream?  At least around here it doesnt seem until recently that Ive seen it.  

Call me what you want but the fact that I have to pay extra on something I'm pretty much buying blind "as is where is" is asinine.  The buyer assumes all risks! 

I guess comission from the seller isnt good enough? 

Local jockey is having a consignment auction with purchases up to 10,000 having 10%..........no thanks and keep your  junk.  

Cant help but say the days of auction "deals" are gone.  

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Local guy was one of the last holdouts around here. Started couple years ago with a sale here and there with the buyers premium. Now everyone of them has it. Not sure if he had just a lower commission or none at all, but he said he had to do it because all the other auctioneers were doing it. He was loosing business the the other guys because the sellers didn’t like his commission. One of his early sales with buyers premium he said don’t blame me, so and so(he named another auctioneer) started it. 

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been growing for 20 yrs ,more in last 5

couldnt get enough $ from little guy  and or junk offerings,lost ad avenues,not competent to get bids , once scam bay perfected it  90% of online are faux or shill.

btos banks govt refused to pay up ,so the "good" honest auctions HAD to compensate.

I reduce any bid by 30% BC, now they out right refuse to do any work but the ABSOLUTE bare minimum .

 

if you get access to a rare preview the 2 photos provided are actually better.

titled items now come with a forced $200/500 item "process fee"

the auction and btos own the items and recycle monthly until a whale is hooked.

if you consign for a sale it is your responsibility to participate in the faux bid,lest the auction buys it for $ and moves to another venue next month. which you pay a no sale and the 10-20%

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30 minutes ago, jass1660 said:

A lot of them aren’t charging commission making buyers pay it instead. 

Thats just insane to me, the auctioneer is performing a service for the seller moreso than the buyer!

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  Less competition in the business so that frees them to grab more money.  The allure of the auction is gone anyways.  There really are no more deals to be had.  Everything has been reduced to the point where the most impulsive buyers set the floor for prices.  There is no such thing as discipline when setting a price.  There was a junk M at an auction this spring that fetched close to 450 dollars.  It is one thing to pay that kind of money when it can yield a great quantity of parts but 80 plus percent of that tractor was not usable including rims, tires, and sheet metal.  I passed up an auction just this past Saturday as it would have been an exercise in frustration in terms of finding value.

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They have been doing it here for years and started with the online auctions, It is hard to justify a 40% commission on two dollar parts that people want to sell separately. The old days it was thrown in a beer tray with some other stuff. I adjust my bidding to allow for the buyers fee. It works well for me. Most places have caps set for large items in increments, so a 100000 item would maybe have a two percent but a 100 dollar item 10.

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Started becoming pretty common here in the last 5 to 10 years. I know a few that charge both commission and buyers premium and some that don’t charge buyers premium. Plus then there’s the 3 to 5 percent fee to use a card if you do that. Sale we had last weekend didn’t charge buyers premium if you were at the sale in person but did if you bid online. I understand they have bills to pay and have to pay the help but it is getting ridiculous anymore to pay a premium to buy something on a sale. 

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We had a landowner sell a farm 15 years ago or so. We thought we had it bought but they decided to auction it instead. The seller was ecstatic because “It wasn’t going to cost him any money to have the auction”. We tried to tell him don’t you think whoever buys it will take into account the premium and bid accordingly? Absolutely could not convince him of that fact. He sells it and it won’t cost him anything was all he could think about. I think buyers premium is to attract business from sellers of low intelligence. Buyers aren’t that stupid, they are all figuring how much the buyers premium is when they make a bid. I am willing to pay what I’m willing to pay. No buyers premium equals higher bid, buyers premium equals lower bid to account for the premium. 

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I think they charge the buyer and seller here, but the seller gets a reduced commission rate.  Local auctioneer here says others do it because it works to get more $ for seller.  I was just looking at a monthly Wogelmuth consignment in Lancaster County.  Somehow they snuck a 10% premium in there also.  

You guys that say no deals is so true anymore.  Between internet bidding a cell phone appraising it is hard to walk away from a sale with an item bought below market value.

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I was in love with buying from out west, but thanks to the trucking situation now that is out...................I haven't bought anything big locally for a long time, but did buy a round baler this spring at a consignment sale.............Would have had more in getting one here from somewhere else, but this one didn't bring much because it is a bigger size than people want here(I wanted one because I don't love moving hay, just feeding it) and the monitor was missing.  That will probably be my last big auction purchase locally here for a good while.  Other than consignment sales in 2 locations, not much in the way of farm sales here these days anyhow.

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It started here about 10-12 years ago. Maybe a bit more. Ritchie bros was the first to do it here. Still a couple smaller guys advertising no buyers premium and doing alright with it.  Now there are auctions where by the time you add on our sales tax you’re paying a extra 25% on your bid price. Really have to watch what you’re doing and pay attention. Those same companies are also charging a sellers fee anywhere from 10-30 %. It’s no wonder the auction companies are making money. 

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2 hours ago, Dirt_Floor_Poor said:

We had a landowner sell a farm 15 years ago or so. We thought we had it bought but they decided to auction it instead. The seller was ecstatic because “It wasn’t going to cost him any money to have the auction”. We tried to tell him don’t you think whoever buys it will take into account the premium and bid accordingly? Absolutely could not convince him of that fact. He sells it and it won’t cost him anything was all he could think about. I think buyers premium is to attract business from sellers of low intelligence. Buyers aren’t that stupid, they are all figuring how much the buyers premium is when they make a bid. I am willing to pay what I’m willing to pay. No buyers premium equals higher bid, buyers premium equals lower bid to account for the premium. 

If going by what I see around here auctioneers are banking on buyers being stupid and reckless.  Especially concerning vintage tractors.  Around ten years ago I was at a consignment sale and there was a rough JD 630 I was going to bid on.  It had all kinds of problems including a flywheel problem as it bounced while the engine was running.  3100 dollars later and after the auctioneer said SOLD I heard the buyer tell his buddy about how this was cramping his Saturday and would have paid more just so he could get back home sooner.  The girlfriend's kid was pestering him to buy it and again the buyer just wanted to be done with it.  Well, it gonna cost to make it right but I'll volunteer for overtime the next several months to get the money.  The kid's mother wanted something to keep the kid occupied and certainly the buyer did not want her to pack her bags.  I shook my head and walked away.  

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I was interested in an item at an auction a few months ago that would be between $15,000 and $20,000. I kept reading the terms and conditions thinking this can't be right. 25% buyers and 15% sellers fee! I called the owner and he said he is also charged listing fees, advertising fees, other charges normal to other auctions. When the auctioneer looked things over and discussed the contract, the auctioneer kept fast talking and had to leave shortly so please sign the contract. Seller didn't get a chance to read the fine print. I skipped that sale and put a big note on my information board to avoid that auctioneer. 

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well i just use arithmetic, if i am willing to pay 10,000 for something i bid accordingly, about 9,000 would be my bid. it's not rocket science.

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Buyers penalty is the correct term

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52 minutes ago, randy hall said:

well i just use arithmetic, if i am willing to pay 10,000 for something i bid accordingly, about 9,000 would be my bid. it's not rocket science.

Anybody that says they won’t attend or bid at auctions with buyers premiums means one less person I have to compete against. 

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It's just deceptive pricing, that's all. If they can get a small portion of the people to feel in the moment of bidding like they're paying the base price and not paying the base plus "premium" (wth does that even mean anyway?), then they get a higher eventual hammer price. Remember, it only takes one or two to space out or get caught up in the moment and the final price goes up. So even if 90% of potential bidders factor this into their personal limit, it doesn't matter because the final bidder didn't and ran the price up to what is really 110% of the items value. I don't like it because it's deceptive and I feel it takes advantage of the "vulnerable" or at least the less savvy bidder. It's not much different than eBay sellers charging $15 to ship something that cost $7, to bake in a little more "fine print" profit. Yes, legally the buyer "knows", but it's underhanded in my opinion.

In the end there's nothing to do, other than factor it into your own limits and hope that your bidding competition is doing the same, or just not bid. I don't like it but I'm not staying home either.

 

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I’m not too savvy with auctions,  but one thing that torqued me was I bid and won a detachable lowboy, then before I could pay for it, they took it away and said that they were going to put it together with the truck and sell them as a unit. Nobody wanted to bid so I got it anyway, but I always wondered if I would still be on the hook if I publicly announced that they could stick the trailer in their *** if they tried to resell it. As I said, I really don’t know too much about auctions and that one took me by surprise. 

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8 minutes ago, Binderoid said:

I’m not too savvy with auctions,  but one thing that torqued me was I bid and won a detachable lowboy, then before I could pay for it, they took it away and said that they were going to put it together with the truck and sell them as a unit. Nobody wanted to bid so I got it anyway, but I always wondered if I would still be on the hook if I publicly announced that they could stick the trailer in their *** if they tried to resell it. As I said, I really don’t know too much about auctions and that one took me by surprise. 

The same happens around here with tractors with loaders on them. Con artist...errrr...I mean "auctioneer" says "we're going to sell the loader then the tractor w/o loader then we're going to sell it together"

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On 8/24/2021 at 9:54 AM, jass1660 said:

A lot of them aren’t charging commission making buyers pay it instead. 

Not disputing your point, just an observation: that’s like cutting six inches off the end of a blanket and sewing it on the other end and thinking it’s longer. ( the seller thinking he’s making out I mean)

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19 minutes ago, Jesse in WI said:

The same happens around here with tractors with loaders on them. Con artist...errrr...I mean "auctioneer" says "we're going to sell the loader then the tractor w/o loader then we're going to sell it together"

That’s pretty standard here. I guess I’ve just never gotten that attached to anything at an auction. If I get it that’s fine, if not at least I kept the money. 

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