Can a bid be bumped up by an auction house to force a sale?

shaun_from_Africa

The_Rainmaker said:

Most reserves have discretion and you should have factored that in to your reserve at the start.

Did you actually read the opening post?
There was a reserve set and this had a 10% discretion agreed with the auctioneers but although the bidding failed to reach the lower figure (reserve -10% discretion), the auctioneers still sold it by making up the difference.

The reason I think this is wrong is that as no one at the auction was interested enough to bid the minimum that the OP wanted, there was obviously little interest and no competition for the item, possibly due to low attendance.
As the required amount wasn't offered by any bidders, the OP should have been given the option to have their unsold goods returned to them and could then have put them in another auction in the future where there may have been more attendees and more competition.

Undervalued

FelineAmazing said:

My husband and I recently entered an item into a local auction with an agreed reserve. The auction house specifies a 10% discretion on the reserve. The highest bid did not meet the reserve, even with the 10% discretion. We understood it to be unsold and then discovered the auction house had processed the sale anyway, saying they’d made up the difference. In our view they should have agreed this with us first and we said no, we accept that the item hasn’t sold and would like to arrange for its return. They’re now saying this means we’re withdrawing the item and will be charged accordingly. We don’t agree! We’re not withdrawing and feel like they’re forcing the sale. Anyone else have experience of this or know where we stand legally? 

Yes they can and it is not uncommon.

You have not lost out, had a bidder been willing to pay enough to meet the reserve (with discretion) it would have sold in the normal way. The auction house is waiving part of their commission and you end up with exactly the same amount of money as if the reserve (with discretion) had been bid.

As an aside, I have never really like a reserve "with discretion". It is rare for the discretion not to be used so in effect you are agree to a reserve of 10% less than stated. But again, normal practice.

Sandtree

shaun_from_Africa said:
The reason I think this is wrong is that as no one at the auction was interested enough to bid the minimum that the OP wanted, there was obviously little interest and no competition for the item, possibly due to low attendance.

Or maybe it is simply overpriced... I am sure we have all had sick days and watched the BBC daytime TV with all the "experts" valuing items and often getting it wrong when it goes to auction.

The reserve, considering any discretion, should be set at the minimum you are happy to accept and you shouldn't complain if it is all you get (no matter how its achieved). Items are put into auction knowing there is an element of gamble involved but at least as the seller you can floor your risk with a reserve.  

monaymadlol

Chandelier bid. Yes it happens at higher end houses, not sure elsewhere 

steampowered

As you are receiving the reserve price which you agreed, I don't think you can complain.

The_Rainmaker

shaun_from_Africa said:

The_Rainmaker said:

Most reserves have discretion and you should have factored that in to your reserve at the start.

Did you actually read the opening post?
There was a reserve set and this had a 10% discretion agreed with the auctioneers but although the bidding failed to reach the lower figure (reserve -10% discretion), the auctioneers still sold it by making up the difference.

Exactly, so you take all the information in to account and then set a reserve that you will be happy with.  Not come crying after the event, it not rocket science.

soolin

Jsacker said:

shaun_from_Africa said:

The_Rainmaker said:

Most reserves have discretion and you should have factored that in to your reserve at the start.

Did you actually read the opening post?
There was a reserve set and this had a 10% discretion agreed with the auctioneers but although the bidding failed to reach the lower figure (reserve -10% discretion), the auctioneers still sold it by making up the difference.

The reason I think this is wrong is that as no one at the auction was interested enough to bid the minimum that the OP wanted, there was obviously little interest and no competition for the item, possibly due to low attendance.
As the required amount wasn't offered by any bidders, the OP should have been given the option to have their unsold goods returned to them and could then have put them in another auction in the future where there may have been more attendees and more competition.

I agree! It does seem a tad dodgy. 

I think that the poster should look over the Ts and Cs carefully. I'm thinking that, if nothing exists to say what happens when the reserve - 10% isn't met, it could be a simple breach of contract for the auction house to sell on the goods in the manner they've done it in here.

If so, it might be possible to lodge an MCOL claim for the difference between what the poster has received and the "guide price" of the item (whether that is something the auction house provided, or via an external valuation of said item in the condition it was in). Not sure if they could claim for intangible losses (loss of enjoyment, stress, inconvenience) as well, but who knows?

Seller is receiving reserve less 10% though as outlined in the terms and conditions. The only difference is that auction house paid the difference between highest bid and reserve less 10% and not a bidder. Seller is receiving exactly the same money. 

soolin

Jsacker said:

soolin said:

Jsacker said:

shaun_from_Africa said:

The_Rainmaker said:

Most reserves have discretion and you should have factored that in to your reserve at the start.

Did you actually read the opening post?
There was a reserve set and this had a 10% discretion agreed with the auctioneers but although the bidding failed to reach the lower figure (reserve -10% discretion), the auctioneers still sold it by making up the difference.

The reason I think this is wrong is that as no one at the auction was interested enough to bid the minimum that the OP wanted, there was obviously little interest and no competition for the item, possibly due to low attendance.
As the required amount wasn't offered by any bidders, the OP should have been given the option to have their unsold goods returned to them and could then have put them in another auction in the future where there may have been more attendees and more competition.

I agree! It does seem a tad dodgy. 

I think that the poster should look over the Ts and Cs carefully. I'm thinking that, if nothing exists to say what happens when the reserve - 10% isn't met, it could be a simple breach of contract for the auction house to sell on the goods in the manner they've done it in here.

If so, it might be possible to lodge an MCOL claim for the difference between what the poster has received and the "guide price" of the item (whether that is something the auction house provided, or via an external valuation of said item in the condition it was in). Not sure if they could claim for intangible losses (loss of enjoyment, stress, inconvenience) as well, but who knows?

Seller is receiving reserve less 10% though as outlined in the terms and conditions. The only difference is that auction house paid the difference between highest bid and reserve less 10% and not a bidder. Seller is receiving exactly the same money. 

My (and I presume shaun's) understanding is that reserve less 10% WASN'T met here.

To quote OP:

"The highest bid did not meet the reserve, even with the 10% discretion"

From the OP :
“ and then discovered the auction house had processed the sale anyway, saying they’d made up the difference”

Manxman_in_exile

I don't really understand what the OP has lost out on here?  They seem to have received the correct* amount of money because the auction house made up the discrepancy themselves.  What the OP seems to be complaining about is either that the item was sold at all, or that bidders didn't think it was worth what the OP did.  I think it's too late to worry about that once you've decided to put it up for auction in the first place.  I would not sell anything at auction without going into a great deal of research and asking the auction house a LOT of questions.  (No pun intended - honest).

My wife and I often watch Wayne Carini on "Chasing Classic Cars".  We have a standing joke that at every car auction Wayne attends he is disappointed by the low bidding levels and the low prices some cars sell for.  (Admittedly these are from a few years ago when perhaps the market was low, but even so... you can't guarantee a price).  A few other interesting observations which were new to me;  when Wayne is acting as a selling agent, some auctioneers are very in his face trying to get the reserve reduced or dropped altogether (but maybe that's just the states); auction houses will commonly accept below reserve bids and make up the difference; and auction houses sometimes broker behind the scenes private sales when reserves aren't met.

The problem with an auction is that you never know who's bidding and what they can afford.  Something that goes for £xxx on one day might go for twice that (or half) on the following day.

*I say "correct" amount because I find it difficult to accept that the auction house did not fully explain their T&Cs about reserves or even just make them available to the OP.  But if they didn't, then the OP needs to complain.  But they won't get their item back.  The most they'd get would be the 10% of the original reserve.  (It's still not clear to me whether the auction house made the low bid up to 100% of the reserve or just 90%)

Keep_pedalling

Usually a seller will have an option for a fixed reserve or to give the auctioneer some discretion. Unsold items may also be subject to a fee ( they certainly are with my local auction house) so getting unsold items back is not without cost.