Help/advice on how 'provisionally sold' works at an auction

JodyGibbons

I need some advice / auction insight as I'm probably missing something.

I recently won an online lot from a traditional auction house specialising in vintage / classic automotives. It was conducted live with a live feed to the auction taking place and I was an online bidder.

I bid and won, with the motorcycle saying provisionally sold. The final price was £1,100 with an auction estimate of £2,000-£3,000. So I thought my opportunistic bid had paid off. I had been following the auction for awhile and noticed that the auctioneer 'passed' lots that didn't reach their reserve.

After the auction had finished I contacted the auction house in anticipation of finalising payment and collection. They said they would ring me back with further details. When my call was returned it was the auctioneer who said the vendor wasn't happy with the final price and wanted £2,000 as a minimum. However if there was a reserve wouldn't the auction have passed this lot when bidding? I thought I was entering into a legally binding contract to follow through with the purchase? 

It seemed to me that if a reserve had been set was it not recognised or missed by auctioneer? Or more likely a reserve was not set by seller and they were not happy with hammer price. If it goes on the hammer price and 'sells' does that mean no reserve?

So my elation at winning appears short-lived. But I do think it's misleading as I did believe I purchased the item at the time.

Many Thanks
Jody

NBLondon

Check the T&C you signed up to when registering to bid?  Your bid is assumed binding i.e. you will buy at that price but it isn't necessarily binding on the seller.   

If it's below the reserve but not too far below - the auctioneer may choose to ask the seller if they will accept the bid.  If it's far below, they don't bother.  Maybe depending on what notes the auctioneer has from the seller.

Based entirely on watching Bangers & Cash...

Pollycat

Did you ask the auctioneer if the seller had set a reserve price and if so, how much was it?

JodyGibbons

Thankyou for the replies.

NBLondon - Ah yes I've seen that cracking little show a few times Yes I did look at the T&Cs when bidding I assumed as it hadn't passed during the auction unlike other lots, that was for sale with no reserve? It did say "All goods are put up for sale WITHOUT RESERVE unless written instructions as to reserve are received".

Pollycat - It sounds like the reserve is £2,000 although he hasn't said specifically. Just the vendor wanted a minimum of £2,000.

k3lvc

JodyGibbons said:

Thankyou for the replies.

NBLondon - Ah yes I've seen that cracking little show a few times Yes I did look at the T&Cs when bidding I assumed as it hadn't passed during the auction unlike other lots, that was for sale with no reserve? It did say "All goods are put up for sale WITHOUT RESERVE unless written instructions as to reserve are received".

Pollycat - It sounds like the reserve is £2,000 although he hasn't said specifically. Just the vendor wanted a minimum of £2,000.

"All goods are put up for sale WITHOUT RESERVE unless written instructions as to reserve are received" doesn't necessarily mean that the reserve is communicated to buyers/bidders - at what stage were you advised it was 'provisionally sold' ?

All you've said to us is that 'guide price' was £2-3k - that has no bearing on a reserve

Maybe time to get your negotiating head on

JodyGibbons

Hi k3lvc,

Yes I didn't think I would be privy to the reserve price beforehand but I haven't been specifically told this afterwards only inferred I guess you could say. It was shown online as the lot was provisionally sold straight after the auction finished and it came up on my online account as such. After that I subsequently contacted them regarding payment / collection.

They did say there might be a little wiggle from the £2,000 minimum requested but I do feel abit begrudged to go any higher now.

Pollycat

I'd want to know for sure (rather than 'it sounds like' whether there was a reserve and what it was.
Surely the seller can't say they want £2k if they didn't put a reserve on the item.

JodyGibbons

Pollycat said:

I'd want to know for sure (rather than 'it sounds like' whether there was a reserve and what it was.
Surely the seller can't say they want £2k if they didn't put a reserve on the item.

Good morning Pollycat,

I will find out for certain as this was my thinking. 

Many Thanks
Jody

NBLondon

Pollycat said:

I'd want to know for sure (rather than 'it sounds like' whether there was a reserve and what it was.
Surely the seller can't say they want £2k if they didn't put a reserve on the item.

Seems logical.  It would be in the T&C for sellers as to whether not formally stating a reserve binds them to sell at the highest bid received.

However - consider this possibility...   The estimate was £2K; the reserve was £1.5K.   The auctioneer uses their judgement to provisionally submit the £1.1K bid thinking the seller and buyer might then negotiate and agree on say £1.3K.   The seller isn't obliged to sell because the reserve wasn't met so they can ask for £2K if they want and relist the lot in the next auction if they don't get it.

Maybe "Passing" the lot happens when the auctioneer decides that it's not near enough the reserve to bother with a provisional - or the seller has specifically said the reserve is a minimum and no provisionals will be accepted. 

Pollycat

NBLondon said:

Pollycat said:

I'd want to know for sure (rather than 'it sounds like' whether there was a reserve and what it was.
Surely the seller can't say they want £2k if they didn't put a reserve on the item.

Seems logical.  It would be in the T&C for sellers as to whether not formally stating a reserve binds them to sell at the highest bid received.

However - consider this possibility...   The estimate was £2K; the reserve was £1.5K.   The auctioneer uses their judgement to provisionally submit the £1.1K bid thinking the seller and buyer might then negotiate and agree on say £1.3K.   The seller isn't obliged to sell because the reserve wasn't met so they can ask for £2K if they want and relist the lot in the next auction if they don't get it.

Maybe "Passing" the lot happens when the auctioneer decides that it's not near enough the reserve to bother with a provisional - or the seller has specifically said the reserve is a minimum and no provisionals will be accepted. 

But if a £1.5k reserve was set, shouldn't the auctioneer advise the highest bidder and see if they are willing to pay the reserve price?
I've seen the reverse happen where the reserve hasn't been reached but the auctioneer asks the seller if they'll accept less than the reserve price.
If the seller put a reserve of £1.5k they shouldn't be asking for £2k.
This sounds unfair to me.

NBLondon

Pollycat said:

But if a £1.5k reserve was set, shouldn't the auctioneer advise the highest bidder and see if they are willing to pay the reserve price?
I've seen the reverse happen where the reserve hasn't been reached but the auctioneer asks the seller if they'll accept less than the reserve price.
If the seller put a reserve of £1.5k they shouldn't be asking for £2k.
This sounds unfair to me.

Not necessarily...    Might depend on the auction house whether the reserve is publicly stated with the details of the lot or kept secret.  Yes - they could say to the highest bidder "There's a reserve of £X do you want to bid up?" but equally they might expect the seller to state that as part of the provisional.  By submitting provisionally, the auctioneer is asking the seller if they might accept less than the reserve.  Could even vary with individual auctioneers and depend if the seller (or the buyer) is a regular that they know.

I agree - it seems unfair for the seller to set a reserve of £X and then effectively raise it after bids have failed to meet it - but they are not obliged to sell.  They may have changed their mind simply on watching the bidders and thinking "I don't want any of those lot buying my beloved {whatever} they're just going to sell it on - I want it to go on to someone who will love it".