Auction estimates

[Snapolit1]

A few years ago it seemed like most of the AH's set modest estimates ahead of their auctions, hoping to blow past them and wave the pom poms after the fact. Seems to me that's changed recently, and now more often you don't see top items either not meeting the estimates or just creeping into the bottom of some broad estimate range. Have auctions changed in this regard?

[Aquarian Sports Cards]

don't know if it's systemic, but I do have to agree I see a lot of pie in the sky estimates.

[Hankphenom]

I've never understood the purpose of AH estimates, even after it's been explained to me with great certitude by their all-knowing principals. Seems to me that if you make it too low, you're inviting bidders to feel foolish or guilty when they exceed an estimate by much, and if you make it too high, you're taking the risk of discouraging bidding by bottom or middle feeders, which gets the ball rolling and is at least a bid, presumably better than no bid. If a high estimate is actually suppose to be a clue about a reserve on the item, just make the reserve the starting bid save everybody the trouble. The whole point of an auction is to let the market decide what something is worth, so what's the point of the AH trying to guess it--or even worse, not really trying to be accurate in their estimate but instead trying manipulate the bidding in some way?

[ls7plus]

Auction estimates/minimum bids used to be set low to supposedly encourage bidders (and ultimately set up a contest of "That's my card! No, it's mine!"). I used to multiply estimates by 4-5X to gain an appreciation for the realistic value of the item. Some auction houses, however, set minimums beyond what an item is realistically worth, which is a huge turn-off. I believe we will eventually follow the path of Mecom's automobile auctions, which allow realistic but low-end reserves reflecting the lot's real value as prices continue to rise on key cards.

May your collecting bring you sheer joy,

Larry

[rainier2004]

I was told those estimates were just there for tax purposes...not a CPA, but that's what I heard.

[Hankphenom]

Originally Posted by rainier2004

I was told those estimates were just there for tax purposes...not a CPA, but that's what I heard.

Not sure what use an estimate would be when you'll have the real number as soon as the auction ends. I've heard several different explanations from AH guys, and it's always some theory about how the way they do it will maximize the bidding. None of it has ever made a lot of sense to me.

[Leon]

Originally Posted by rainier2004

I was told those estimates were just there for tax purposes...not a CPA, but that's what I heard.

That sounds crazy and I have never heard that. An estimate isn't something you put on taxes, a sale is.
I can't speak for any person or auction house but when Heritage sold my first collection, if I remember correctly, their estimate, in total, was within approx. 10% of the ending price. I think AH's try to be accurate, mostly. And there are a few that inflate estimates to get the consignment but that isn't a good long term strategy imo...

[ullmandds]

Originally Posted by Snapolit1

A few years ago it seemed like most of the AH's set modest estimates ahead of their auctions, hoping to blow past them and wave the pom poms after the fact. Seems to me that's changed recently, and now more often you don't see top items either not meeting the estimates or just creeping into the bottom of some broad estimate range. Have auctions changed in this regard?

I’m not sure if the impetus for this thread is the heritage mailing but oh my God those estimates are outrageous!!