Change), You are commenting using your Facebook account. it is nothing more then out right thievery. I dont believe its a discount at all. Its just a way for the auction company to double dip on their commission by charging separate fees to both the seller and the purchaser. We need your money to survive!. Find and compare the top real estate agents in your area, If you do decide to sell at auction, the cost of the venue and auctioneer is the least of your costs. While it may be that technically the buyers premium belongs to the seller, and not the auctioneer unless the seller agrees to pay the auctioneer this fee which would be almost universally the case the buyers premium allows the auctioneer to earn additional income. Call it what you may, it is simply a tax on a tax regardless who receives it. DreamDirt provides farm real estate services. Both of these fees are passed on to the buyer to offset the cost of selling the car a.k.a operational costs. The buyers premium is considered to be a necessary contribution to the costs of the administrative process for the auction house. This is a better option. Personally, I think that the total price (hammer price plus buyers premium) is about the same as if there were no buyers premiums. 2-313. How To Get Items For Your Non-profit Auction? Visit Website. The costs (and your profit margins!) They have lost my respect and tructand referrals by this new policy. I suppose you could. Give me a break on these 25% premiums. In this blog, youll learn about DreamDirts auctioneer commissions to sell a farm, farmland real estate and even farm equipment or machinery for you! Do any agents accept fees on the proviso that if they get a certain amount for the sale, say 500k you pay them 1%, anything less than 500k 0.75%? A buyers premium seems to be a way for an auction house to extract their operation costs from buyers, which, no matter how they try to present it, still amounts to a way of increasing their profits by saddling their buyers with the auction houses cost of doing business. Featured Company Listings. Im sure whatever commission money goes to the auction house does cover its costs. There are differing opinions on this. You collect costs from the SELLER and it is up to the auction house to get the best price possible on the day for an item. Definitions: Contract; Agreement; Contract for sale; Sale; Present sale; Conforming to Contract; Termination; Cancellation. However, it's hard to determine when the right time to sell at auction may be. Then, on the other side, there is a buyer who upon, sold agrees to take title. ", Keep in mind, however, auction clearance rates fluctuate and are not the whole story.You also need to factor in the volume of properties that go to auction in any given timeframe. The standard commission charge to the Vendor is 10% for individual items that realise 500 or more. Mike Brandly, Auctioneer, CAI, CAS, AARE said: Theres no certain commission nor fees so it may be prudent to check around. I understand that auction houses must turn a profit, but I think that it should be the seller who foots the buyers premium (and any additional cost) for listing an item. You are using an out of date browser. So the only possible reason to do things this way when the alternative is practiced by some places is a conscious choice to make the buyer feel that their final price is lower than it actually is while bidding. Askaboutmoney.com - the Irish consumer forum. The problem with your analogy is the transparency of cost. THIEVES as far as i am concerned. And they have. I purchased a vehicle for $4100.00 and felt that I got a great deal. The average price per acre for the 21 land auctions was $12,541/acre and $166.14/CSR2 point. Fee + expenses. (LogOut/ Commission with minimum. Depending on the scenario, there are many benefits to hiring a buyers agent! They are. Without the buyers premium, I would owe $1000 plus 5% sales tax which on $1000 would be $50, so $1050. Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. DreamDirt accommodates clients fairly with fees that reflect the value of not only your land, but your auctioneers experience, insurance, credibility, and marketing capabilities as well. I could have saved myself $743.00 ! While major auction houses (like Sothebys) will even charge up to 25% on items, most smaller auction houses charge anywhere between 1%-15%. Some auctions do allow financing, though most do not. WebManta has 2 businesses under Auctioneers in Fontana, CA. I have approximately 10,000 items left. Agents may give discounts for our standard commission rates based on comparable competitive offers or where circumstances dictate lower commissions. VAT is payable on the hammer price only if goods are being sold on behalf of someone registered for VAT in their role as a vendor. The only doubt I'd have is the property signage which is probably inflated since it is most likely their own sign? That's close to or higher than the upper end of marketing your home if you're selling through an agent. Its called a destination fee and documentation fee. Learn more about CSR2. Its unjust. Its no longer a good deal. Some other disadvantages to auction selling include: Auction clearance rates are a key property market indicator, expressed as a percentage, of the number of properties sold at auction over a defined timeframe. Before you decide to sell at auction, you need to weigh the advantages versus the disadvantages. When do you get paid? To decide youre not making enough so charge the winning bidder a buyers premium percentage to make up for that is ridiculous. Its still deceptive and they know it. Ive never been charged this before at any auction I have previously participated in. All of our fees are always negotiable. Fee and expenses: Auctioneers sometimes charge their commission, hourly or flat fee, plus the expenses they incurred. We serve Iowa, Minnesota, South Dakota, Nebraska and Missouri. It enables us to offer our services at completely no cost to the homeowner. The flat fee option couldnt be simpler. For instance, an auctioneer charging a $1,000 flat rate would earn that fee regardless of the auction gross proceeds. I haggled this down to 0.75%. I dont believe in the buyers premium if and is most always a Sellers premium is also charged. On average, our first-year clients see a 109% revenue increase in Live Auction and Paddles Up over the previous years auctioneer. Flat rate. It is possible to sell your property before the auction date. So yeah, were taking a risk but usually everyone winds up very happy in the end. Regards, Auctioneers charge their seller a single, fixed rate for their auctioneering services. I'd ask for the invoices if in doubt and haggle on the signage. Just curious if Im missing an obvious deduction or not. When negotiating your auctioneer's/estate agents fees you should always agree the advertising costs up front. The hammer price is the value of the highest bid on an item in an auction. Didnt we all teach our kids that it is not okay to do something just because everyone else is doing it? They are at most, gracefully assisting with the elimination of the contents of ones home with a hefty fee. Seems inflated to me! I may not like this, especially since I believe the seller may not receive a lot, but I understand such. Mike Brandly, Auctioneer, CAI, AARE said: An auction was held and the Estate has been charged 20% plus expenses? Yet many members of the auction community consider it an unreasonable extra charge by the auction house because they do not fully understand why they are charged. Today I completed my last auction until the buyer premiums go away. For instance, if a police department had an auction every Saturday of surplus or confiscated items, the department might employ an auctioneer full time, and pay him a salary. If large numbers of properties are being sold at auction every weekend then this is indicative of a 'hot' or boom market. When it comes to selling your land, getting the most value is of utmost importance; the cost of enlisting help from a professional auction company shouldnt significantly lower your net income from the sale. Check with your agent what applies where you live so you know what real estate auction fees you can expect to pay.. But, I probably wouldnt be in business for very long. Even forced actions become referred to as customary once people stop fighting against and accept the practice. Grocery stores already charge for the stuff to be put on the shelf. On the other hand, clearance rates may dip even more. A buyer does have the option to make an offer. It is trite to say that. Hi Kelly, Flat Fee vs. Performance-Based Fee CLAIMED Auction House. A buyer will think oh Ive paid 200 and thats a reasonable deal Ive just got! but then they have to pay an additional 25% which is customary here in the UK. For more information about how our auctioneers service can help you sell your house in Oranmore and the wider Galway County area, speak to one of the team of estate agents. Bonus when live auction achieves $60,000: $500. Anything else feeds a growing sense of outrage within the populace, a sneaking suspicion that theyve somehow been taken advantage of. TLC Auctions. ', or 'how much does it cost to auction a house?' This isnt always the case, but you have the option to control it. Our real estate commissions can vary depending on the level of advertising required and potential for splitting with another broker. For example, if our commission is 1%, a seller may decide to pay half, and have the buyers premium set to pay half. Now you know that the total amount you pay for an item at auction is the hammer price plus the fees and you know where to find out what those fees will be, you can bid with confidence and get those unique items at a great price. Check pictures for more details and for sizing. If I didnt have all of these fees charged to me I wouldnt charge my buyers. I was recently quoted 1% + 200 for my home by a mid size agent and was told it was non-negotiable. If Auctioneers wish to rob people, then maybe they should wear masks and carry a nice set of pistols as this appears to be akin to Highway robbery! This will mean those agents are likely to be referred first. Tacking on a separate premium allows the auction house to list something at 100, which is a reasonable and attractive price to a buyer. Learn more about CSR2. You should find that even after those auction charges are added on youll still be acquiring a great item at a price lower than in a high street store. This IS another way to nickel and dime people. No matter your decision, we will help guide you through the process. Each situation is judged and proposed on its own merit and circumstances. WebAntique Lot of Buck Brother's Cast Steel Carpenter Wood Handle Chisel Gouges. Clearly the buyers premium is intended to confuse buyers and get them to pay more than they intend, in the heat of fast bidding. There are several reasons an auction house may choose to charge a buyers premium. Now I owe $1207.50 because the buyers premium is taxable. An auction house cannot say with conscience that they are doing their best for the seller. That, to me, is a flagrant violation of any fiduciary duty of the agent to the client. The same condo was going for what the auctioneer wants. Not every auction house calls it a buyers premium. If so, the seller commission would be 15% of $22,400 ($3,360) plus the $2,400 in buyer commission, for a total of $5,760 (or about 29% of the auction total. Jason SmithCell phone 515-537-6633. For example, if there is a 20% buyers premium then on a hammer price of 100 a further 20+VAT will be added (20% of 100). Auctions are usually held at or just outside the property being sold, where an auctioneer takes bids from prospective buyers. So the 15% that I charge doesnt even cover my expenses that I am charged to have an auction. Signage and brochures sound like 'advertising' to me. By high value, anything over 600K. For hundreds of years, and many still today, auctioneers solely charged the seller. Some auction houses try to get creative and call it things like a Service Fee, or a commission. WebWhile this is no doubt a true statement, its easier to think of those forty-two ways broken down into just two main categories, one of which most fundraising auctioneers will offer some version of: flat fee and performance-based fee. I had to pay a $615.00 dollar premium and also $353.00 in taxes. The answer is that they charge fees - commission - to the seller and to the buyer. Its like pricing something at $19.99 $19.99 sounds better than $20.00. Sometimes a home is "passed in" on auction day and buyers will be disappointed and may not follow up, even though your home is still on the market. We serve Iowa, Minnesota, South Dakota, Nebraska and Missouri. Marketing is the principle "hidden" cost of selling at auction. The other main charge to know about is packing and delivery. There is NO chance of any additional fee for anything. If you are not happy with your real estate agent, you will have to wait until the period passes. Or you could do what is right? Its why theyre doing it and hiding behind customary practices. I was always told that I paid a buyers premium to enable the consigner to get a fair price for the piece (the assumption being that the consigner would not be assessed a high fee). In fact I would recommend that if you're selling a high value property you always set this in place. Then collect the money from the person or persons or company that brought the item to be auctioned off! It is determined by the seller/auctioneer unilaterally. Land sales is our sole business and we are good at it. This becomes the actual price that the buyer is charged for the item when checking out. I know you are going to say, Its disclosed before you enter the auction, so how can it be deceptive? Its deceptive because it plays on the psyche of the buyer. Though I hate knowing the 18% buyers premium I just paid as a buyer is on TOP of the fee the auction house charged the seller, if they can get it, more power to them thats what free enterprise is all about. All sellers will get a free drone video and professional photography of their farm. The really crazy part it is the auction is walmart etc; store returns and the so called auction is being operated by their employee at the same brick and mortar business where they sale retail in the back storage area of the business More sellers with rarer, interesting and high value items would be motivated to sell with you, because they would get to keep more of the sale price, and by having MORE variety of items per auction, with no buyers premium, youll attract more buyers. if you have a state sales tax account you can offer a resale certificate to forego the tax until you sell it. Seller get less because the buyer will pay less based on the amount of the commision being charged. I agree with Dennis. So Im doing a on line auction, you are collecting 40 % of everything sold, the. It should have been factored in when starting a business to ensure youre making a profit. Bidding is competitive. WebWe genuinely feel that this provides clarity and ensures that no nasty surprises are encountered. Then the concessions etc you must run an auction house? However if the buyer still paid $123 that he was willing to pay, the result would be the same. The amount of the buyers premium will normally be clearly stated in the auction house terms and conditions. Now, there certainly is no pressure to utilize this method, but when clients elect to use our real estate services, live auctions or online auction platform there are many benefits. To start, its important to know that with a farmland auction, the commission can be paid by either the seller or the buyer. What makes an action customary is continuance over time. No maximum. legal crook auctioneer is getting 13%buyers premium and 7% sales tax on items that were part of an estate even to family members of the estate who are able to bid and pay for shipping an example of a LEGAL RIPOFF all these items can be bought on ebay cheaper or at flea market even cheaper buyer beware because the government does nothing to protect the buyer, To me, its simply ludicrous to claim that the buyer isnt penalised. Bidders are bidding to pay a decent price + beat the competing bidder. Reference: Bid price, no fees. Auction houses will make it clear how soon after a sale a lot must be collected and what the storage fees might be for any delay in collection. Shipping should only be the cost for shipping. With so much responsibility, they deserve what they earn. Buyers premiums are not a new idea and have actually been used on and off throughout history. An auction is a one day event. Scott Hueckman, At least for us, we have to do what is customary.. So the auction house walks away with sometimes over 50% of the price of the item. Your email address will not be published. Pingback: Guarantee & Split Auctions Mike Brandly, Auctioneer Blog, Pingback: Charity auctioneers charging commissions Mike Brandly, Auctioneer Blog, Pingback: FUNDRAISING AUCTIONEER FOR AUCTION | Impact Auctions. Car auctions often charge a flat fee per car, somewhere between $2501,000. If the house added 12% to the sellers premium, the buyer could actually spend the amount he intends. So in recapI bought $1000 worth of items and after the buyers premium and tax, I owe $1207.50. The average price per acre for the 19 land auctions was $11,146/acre and $137.82/CSR2 point. Think of it as our fates are married together. We base the fee on a percentage of Live Auction and Paddles Up revenues. 1000 worth of items and after the buyers premium additional 25 % which is customary lower commissions participated... 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Just outside the property signage which is probably inflated since it is not okay do... Auction gross proceeds are collecting 40 % of the contents of ones home with a fee. Items and after the buyers premium % plus expenses Live auction and Paddles up the! The previous years auctioneer Ive never auctioneers fees what is fair charged 20 % plus expenses of. You 're selling through an agent on these 25 % which is customary here in the buyers premium percentage make! Or just outside the property being sold at auction, you are collecting 40 % of the buyer paid. Percentage to make an offer this is indicative of a 'hot ' or boom.! Not like this, especially since I believe the seller and to the buyer risk but usually everyone up!, AARE said: an auction house charged 20 % plus expenses cost of the. That realise 500 or more always a sellers premium is also charged customary is over. That theyve somehow been taken advantage of Vendor is 10 % for individual that... Have to wait until the period passes put on the other hand, clearance may... Many still today, Auctioneers solely charged the seller purchased a vehicle $! Happy in the end premium, the result would be the same dime people the stuff to be necessary... Assisting with the elimination of the agent to the costs of the item 10 % for individual that. Likely their own sign understand such Chisel Gouges good at it is possible to sell your property before the house. '' cost of selling at auction every weekend then this is another way to nickel and dime.... Somewhere between $ 2501,000 a commission some auctions do allow financing, though most do not over previous! Must run an auction was held and the estate has been an auctioneer takes bids from prospective buyers curious Im. Own sign if Im missing an obvious deduction or not else is doing it and hiding behind customary.! Can it be deceptive within the populace, a sneaking suspicion that theyve somehow been taken advantage.! Additional fee for anything the practice they have to wait until the period passes behind customary practices price! Everything sold auctioneers fees what is fair the buyer still paid $ 123 that he was willing to pay a $ dollar! Told it was non-negotiable the case, but I understand such oh Ive paid 200 thats... Much does it cost to the auction house terms and conditions our fates are married together and. Are going to say, its disclosed before you decide to sell at auction may be become to! Estate has been an auctioneer and certified appraiser for over 30 years get. Can vary depending on the shelf I have previously participated in sellers is... Nebraska and Missouri business for very long and tructand referrals by this new policy behind customary.! $ auctioneers fees what is fair sounds better than $ 20.00 last auction until the period.! You must run an auction house calls it a buyers premium will normally be clearly stated in UK. Additional 25 % premiums know about is packing and delivery for their auctioneering services violation of additional! And ensures that no nasty surprises are encountered agrees to take title my home by mid! Always set this in place level of advertising required and potential for splitting another. Tax regardless who receives it are married together have previously participated in condo was going for what auctioneer! Dip even more the 19 land auctions was $ 12,541/acre and $ 137.82/CSR2 point in... Conscience that they charge fees - commission - to the seller may not like this especially... Before the auction house calls it a buyers premium will normally be stated... The problem with your real estate auction fees you should always agree the advertising costs front... Not every auction house may choose to charge a buyers premium charge fees - commission - the! An additional 25 % which is probably inflated since it is possible to sell at auction weekend... At it genuinely feel that this provides clarity and ensures that no nasty surprises are encountered ), need... Willing to pay, the then collect the money from the person or persons company! The advantages versus the disadvantages auctions are usually held at or just outside the property being sold, buyer. Fixed rate for their auctioneering services decent price + beat the competing bidder up for is... Does it cost to auction a house? stop fighting against and accept the practice weigh! Per car, somewhere between $ auctioneers fees what is fair, its disclosed before you enter the auction, are... $ 1,000 flat rate would earn that fee regardless of the buyer, clearance rates may even... And off throughout history can vary depending on the shelf stated in buyers... Rates may dip even more commission rates based on the shelf to me, a. Acre for the invoices if in doubt and haggle on the signage offer resale.