2. Know what’s included in your purchase. Does it come with a frame? Will it be shipped, or do you have to carry it off the ship? Is there sales tax? What about Customs charges? When can you expect delivery?
3. When in doubt, don’t bid. Remember, this is an auction. You are under no compulsion to bid. Artworks have a minimum price, but no maximum price. Prices go up as the bidding progresses. A bid is a legal commitment to buy. If you overbid for an item, you have only yourself to blame.
4. Understand the difference between hammer price and final price. Hammer price is the highest bid; it is the last price offered before the auctioneer declares an item sold. If you bid $300 for a work and the auctioneer said “sold”, that would be the hammer price. It is commonplace for auctioneers to add a surcharge called a “buyer’s premium” of 10 to 20 percent of the hammer price. Buyer’s Premium was instituted by the major New York and London art auction houses a couple of decades ago and is now in almost general use at all types of auctions. If the buyer’s premium was 15% and the hammer price was $300, the buyer’s premium would be $45. If you will not carry your items off the ship with you, then a shipping charge will be added; sometimes, there may be handling fees or insurance charges. If you live in the state where the auction house has a facility, there may be sales tax as well. Your formula for figuring final price in this instance is: hammer price + buyer’s premium + sales tax + shipping & handling + insurance = final price. Bid accordingly.
5. Understand what an appraisal is (and isn’t). Typically, Certificates of Appraisal are offered with the artwork you buy a cruise ship. There is a charge for this service. Sometimes, a bidder gets carried away in the moment and bids more than they had planned. This happens so often at all types of auctions that there is a name for it: auction fever. These folks get home, get their bills from the cruise, and get a bad case of buyer’s remorse. When the art arrives, they take it down to their local gallery or auction house to get an “appraisal”. The buyer wants to find out if they got a good deal or not. Nine times out of ten, the buyer will be told that the appraisal that came with the artwork is too high. Why is this? Two reasons.
Originally posted 2011-03-11 11:02:00.