Buying Antiques at Auction:
What Your Mother Never
OK, let’s get our cards on the table right
away: we’re dealers, and we think that in most cases, you will do
much better buying from a dealer than at auction. Our objections to buying
at auction are based on the simply fact that, by their nature, many auction
practices work against a buyer’s interests. We believe that, from
a buyer’s perspective, dealers trade more fairly than auctioneers.
To be fair to auctioneers, we must point out that while all of these practices
are widely used, not all auctioneers use all of them, and the best use
only a few of them, but almost none of them use none of them.
Auctioneers Represent Sellers, Not Buyers
Auctioneers are agents for the seller: their purpose
is to sell at as high a price as they possibly can. This increases their
income from both the seller’s commission and the buyer’s premium.
But more important, it enables them to compete with other auctioneers
for future consignments. All auction reports, many of which are based
on auctioneers’ press releases, headline the high prices –
which benefit the seller and the auctioneer, not the buyer.
Look at show reports rather than auction reports,
and you’ll notice an enormous difference. Dealers promote the number
of items that they sold, not the prices they achieved. Dealers are proud
of how much they sold, not how much they sold it for. This is because
dealers compete with other dealers for customers – unlike auctioneers,
who compete for sellers. Dealers win this competition by keeping their
prices as low as they can and still make a profit. Dealers complain as
bitterly as anyone about high prices, while auctioneers love them.
To sum up: competition among auctioneers drives prices
up, competition among dealers drives prices down.
Auctions Are Theater, Not Reality
To get the highest possible prices, auctioneers have
to keep the audience as excited as possible: the higher the adrenaline
level on the floor, the higher the prices achieved. Excitement is high
when competition among bidders is high, when sell-through rates are high,
and when prices are high.
Auctions are theatre, and the theatricality is designed
to increase excitement on all three fronts. But we must remember that
theater is fiction. To increase the sense of competition, auctioneers
will “bid off the wall” or, as it is called in high-end auctions,
“bid off the chandelier.” If there is only one bidder, the
auctioneer will pretend to accept competing bids from a fictional bidder,
such as the wall or a chandelier. Sometimes all bidding is phantom but
the auctioneer will pretend to accept competing bids in the hope of attracting
a “third,” but really the first, bidder to come in at a higher
To drive a single bidder upwards by making the chandelier
bid against him, the auctioneer needs another piece of theatricality –
the secret reserve. The reserve is the lowest price at which the seller
will sell, and it is known only to the auctioneer and the seller, never
to the buyer. This enables the chandelier to work the lone bidder up to
the reserve, when a legitimate sale can be made. In this case, the sale
price is not the result of competition between bidders, as the bidder
believes, but of an “agreement” between the seller and the
buyer, of which the buyer is totally unaware. The buyer believes that
he has paid one increment more than his competitor was willing to, but
he has been fooled, he has paid what the seller wanted.
Sell-through rates are made to appear higher than
in fact they are by “selling” to the chandelier. All this
requires is that the auctioneer assigns a secret number to the chandelier,
and when an item fails to meet its reserve, the auctioneer announces the
highest phantom bid as the successful bid: the chandelier’s number
appears to the audience to be that of a genuine bidder. Of course, again,
this false impression can only be given if the reserve is kept secret
from the real bidders, otherwise they would know that the item had not
sold. On extreme occasions, there may be no bidders at all, but the chandelier
may bid against the wall and win the item at a high price. And nobody
on the floor can tell: it is impossible to know which lots sold and which
did not. It’s good theatre, but it’s bad for the buyer. (Click
here to read about the
history of these practices in Sotheby’s and Christie’s, and
some of the legal repercussions.)
In the heady excitement of the saleroom, a buyer
can all too easily be misled into thinking that his opponent’s bid
is the true value of the piece, simply because it is a bid. This conveniently
ignores the fact that the other bidder may be thinking exactly the same
thing. In the calmer atmosphere of a shop, however, a buyer will look
at the price tag, and remember what he has seen comparable pieces priced
at within the last two or three years.
In a dealer’s showroom a customer’s sense
of value is based upon his previous experience, and upon discussion with
the dealer: in an auction it is based upon the excitement of the day.
Caveat Emptor: At Auction, There Are No Guarantees
We decided not to bid on a table at a recent auction.
It was described in the catalogue as “A William and Mary oak side
table with molded apron and bobbin turned legs, c. 1700.” If we
had bought it, we would certainly have put those details on the tag, but
we would have added, as would all good dealers -- we are in no way exceptional
here -- “Top appears to be old replacement, one foot restored, minor
worm damage.” We would also have guaranteed that description, and,
if we had been proved mistaken at any time in the future, we would have
taken the table back and given a full refund. And so would all good dealers.
But auctioneers would not. Besides providing only
an abbreviated and selective description auctioneers also go to great
lengths in small print and convoluted language to say that they refuse
to stand behind even the inadequate descriptions they do provide. And
some auctioneers, of course, merely identify the item but do not describe
it at all (see a typical auctioneer’s disclaimer at the end of this
article). Note that it states that the auctioneer may or may not have
inspected the item carefully, that the description may or may not include
notes on condition, and that when it does, only some imperfections may
be noted, and that it may say what the seller wanted. The disclaimer makes
clear that “information provided to bidders…is not a statement
of fact.” Disclaimers like this mean, of course, that auctioneers
are never responsible for “errors” in any information that
they give to buyers. The information that guides a decision to buy must
always be provided by the buyer, and the buyer alone, never by the auctioneer.
Dealers, on the other hand, know that it is their
job and responsibility to know more about their goods than their customers
do. This means that they inspect each item carefully, describe the results
of their inspections in detail, and guarantee the accuracy of their descriptions.
Dealers pay for their mistakes: customers never do.
In auctions, buyers pay for mistakes, auctioneers never do. Dealers back
their assessment of their antiques with their own money: dealers put their
money where their mouth is, auctioneers rely on their mouths alone.
Knowledge Is King (or Queen)
A thorough knowledge of an antique enhances its value
and the pleasure we get from owning it. The top auctioneers will provide
well researched information about the handful of antiques that they believe
will fetch the highest prices. And that is all. Nowhere else in the auction
scene will you find the sort of background knowledge that enhances both
value and pleasure. Good dealers research everything that they sell, and
pass this knowledge on to the buyer. If you buy an antique from a dealer,
you will be given information about its origin, its social context, its
place in the history of the form, you will learn about the materials and
methods of construction, and about what makes it stand out from other
similar examples. You will be given a guided tour of the antique showing
exactly what has been done to it over the years, and what remains in original
condition. You will therefore learn why it is worth this much and not
In an auction, this sort of knowledge, which is often
critical in deciding how much to pay, must all, once again, be provided
by the buyer. The auctioneer makes no effort, and takes no responsibility.
In a shop, the knowledge of a piece is provided by
the seller; in an auction it must be provided by the buyer.
It must be clear that we consider the ethics of many
of the auction practices to be dubious at best. But our main intention
has been to show how auctions are driven entirely by the interests of
the seller, and pay no concern whatsoever to the interests of the buyer.
And that is how it should be, for that is the nature of the beast. (To
learn what happened when a seller sued an auctioneer for failing to get
the highest possible price, click here.)
For dealers, however, customers’ interests
are paramount. None of us wants to sell something that is “wrong,”
for that will always, eventually, result in the loss of the customer we
sold it to. Good dealers know that customers are more important than individual
Extracts from an Auctioneer’s Disclaimer (genuine,
anonymous and typical)
[The Auctioneer’s] knowledge in relation to
each lot is partially dependent on information provided by the seller,
and [the auctioneer] is not able to and does not carry out exhaustive
due diligence on each lot. Buyers acknowledge this fact and accept responsibility
for carrying our inspections and investigations to satisfy themselves.
[The auctioneer] accepts bids on lots solely on
the basis that bidders…have satisfied themselves as to both the
condition of the lot and the accuracy of its description.
Catalogue descriptions and condition reports may on occasions make reference
to particular imperfections of a lot, but bidders should note that lots
may have other faults not expressly referred to in the catalogue or condition
report. Illustrations are for identification purposes only.
Information provided to bidders in respect of any
lot…whether written or oral…is not a representation of fact,
but rather is a statement of opinion genuinely held by [the auctioneer.]
Neither [the auctioneer] nor the seller (i) is liable
for any errors or omissions in information provided to bidders……(ii)
gives any guarantee or warranty to bidders and any implied warranties and
conditions are excluded….(iii) accepts responsibility to bidders in
respect of acts or omissions (whether negligent or otherwise) …