Originally Posted by Peter_Spaeth (Post 2172330)

It has always seemed to me that if a consignor only wants to sell at a certain minimum price, the simplest and most direct way to achieve that is to start the bidding there. But nobody ever seems to want to do that.

Originally Posted by spacktrack (Post 2172314)

I agree that not disclosing an item has a reserve is poor form, and publishing price realized in those instances where an item actually did not sell is wrong, but I just wanted to drop in a point of clarification as REA uses reserves so very infrequently that it may not be top of mind how exactly they're used here. (For those curious, REA offered 20,312 lots this year and only 38 had reserves.)

REA does not ever place bids on a house account, in any circumstances, and does not ever move up a bid to one increment below a reserve amount to simulate interest in a lot.

If an item has a reserve, it is noted on the item page and the status will not change until the reserve is met. If an item has a $10,000 opening bid and a $25,000 reserve, but bidders only bid up to $20,000, that will show as the last bid with the reserve not met and the item will not sell. Similarly, if an item gets the $10,000 opening bid, that will show as the last bid and the item will not sell. REA does not move the bid up to $24,500. Reserve amounts are always available upon request.


In our terms, these issues are addressed:

10. Each item in the auction is accompanied by an opening bid. Select items may have a confidential reserve placed on them by the consignor. These
items will be clearly designated as such on the individual item pages online. Until such time that the confidential reserve is met, the item page will
display “Reserve Not Met” directly underneath the current bid. Bidders may continue to bid on such items using all available bid increments. Once
the confidential reserve is met, the status of the item will change to “Reserve Met” on the item page. Reserve amounts will not be disclosed on the
item page but are available upon request. Items with a confidential reserve may be accompanied by an estimated value. The confidential reserve
amount will be lower than or equal to this estimated value.

13. There is no circumstance under which Robert Edward Auctions may execute bids on its own “house account,” thereby unfairly competing with
bidders. In fact, to be clear, Robert Edward Auctions does not even have a “house account,” unlike many other auctions.


Brian

Originally Posted by Rhotchkiss (Post 2172299)

There are many new members lately, and I assume several of them are learning about auction houses and starting to participate in auctions. For the benefit of these folks (and others), this thread highlights and discusses the existence of hidden/secret reserves:

It is common for auction houses to allow consignors to put a reserve on a lot. Most auction houses will state, up front, on the listing, that there is a reserve and whether or not the reserve has been met. Often times, when a reserve has not been met and the auction is nearing its close, the auction house will disclose the reserve amount by making that the necessary next bid (see Heritage and REA). It is all very obvious and transparent. However, this is not how all auction houses deal with reserves.

Sometimes, auction houses will not disclose that there is a reserve, and, even worse, they will bid the item up to that non-disclosed reserve amount in an effort to get someone to bid that minimum. I think this sucks ass because it makes it appear as though other people are bidding on the item, when they are not. RR Auctions does this (from their terms and conditions):

11.3 Reserves

Lots may be subject to a reserve which is the confidential minimum price below which the lot will not be sold. Consignors may not bid on their own lots or property. RR Auction may, from time to time, bid on items that it does not own. RR Auction may execute bids consecutively or otherwise up to one bid increment below the reserve.

These auction houses rely on rules contained in their terms and conditions (like above) to justify their ability to bid on individual lots to push a card, artificially, to the minimum price its consignors want. The auction house has no interest in buying the item and has no intent to buy the item. This is literally the definition of shill bidding: "the illegal practice of a seller or a seller’s acquaintances placing bids on his or her goods in order to drive up the price". Yet, somehow, this practice is not legally shill bidding (enter Scott Russell with explanation).

Regardless, I think its a real shitty practice. First, because its literally a form of shill bidding. Second, because it makes a buyer feel like they have bested real suitors when they have not; instead, it was them against an auction house pushing a lot to a hidden reserve price. Third, it creates fake and semi-fake comps; they are fake when the "highest bid" is the AH and the lot does not sell but that fact is not designated in the listing and semi-fake when one person wins a lot for 2+ increments higher than a real buyer was willing to pay.

Feel free to use this thread to out auction houses with hidden/secret reserves and/or to tell your story about hidden reserves.

Originally Posted by Rhotchkiss (Post 2172299)

There are many new members lately, and I assume several of them are learning about auction houses and starting to participate in auctions. For the benefit of these folks (and others), this thread highlights and discusses the existence of hidden/secret reserves:

It is common for auction houses to allow consignors to put a reserve on a lot. Most auction houses will state, up front, on the listing, that there is a reserve and whether or not the reserve has been met. Often times, when a reserve has not been met and the auction is nearing its close, the auction house will disclose the reserve amount by making that the necessary next bid (see Heritage and REA). It is all very obvious and transparent. However, this is not how all auction houses deal with reserves.

Sometimes, auction houses will not disclose that there is a reserve, and, even worse, they will bid the item up to that non-disclosed reserve amount in an effort to get someone to bid that minimum. I think this sucks ass because it makes it appear as though other people are bidding on the item, when they are not. RR Auctions does this (from their terms and conditions):

11.3 Reserves

Lots may be subject to a reserve which is the confidential minimum price below which the lot will not be sold. Consignors may not bid on their own lots or property. RR Auction may, from time to time, bid on items that it does not own. RR Auction may execute bids consecutively or otherwise up to one bid increment below the reserve.

These auction houses rely on rules contained in their terms and conditions (like above) to justify their ability to bid on individual lots to push a card, artificially, to the minimum price its consignors want. The auction house has no interest in buying the item and has no intent to buy the item. This is literally the definition of shill bidding: "the illegal practice of a seller or a seller’s acquaintances placing bids on his or her goods in order to drive up the price". Yet, somehow, this practice is not legally shill bidding (enter Scott Russell with explanation).

Originally Posted by Prof (Post 2172337)

I assume it's a psychological ploy to start below the minimum price because it will entice people to believe that they can 'get a deal.'

That way, you get a handful of bidders who've put in a bid below the minimum, and now they're all emotionally invested in the item... which leads to bidding wars and a final price above the minimum.

Just starting at the minimum price will induce less action, and just have people going, "Yeah, that's market value. Not exciting/I can find that elsewhere."


I'm in favor of just starting bidding at the minimum acceptable price for the seller. Weed out some of the drama. But, people love drama.

Originally Posted by Peter_Spaeth (Post 2172330)

It has always seemed to me that if a consignor only wants to sell at a certain minimum price, the simplest and most direct way to achieve that is to start the bidding there. But nobody ever seems to want to do that.