News & Features

A buyer’s premium is a surcharge paid on top of the hammer price at an auction. For example, with a 10% buyer’s premium, a $1,000 hammer price (Sold! for $1,000) would require the buyer to pay $1,100 ($1,000 + 10%) to the auctioneer/seller.

Some auctions/auctioneers charge a buyer’s premium, and some do not. There is no right or wrong about charging a buyer’s premium — but the constant contention that few people (and only insignificant people) are deterred from an auctioneer/auction that charges one misses the much bigger picture.

We start today with the fact there are [only] two types of auctions. Just as state law dictates all across the United States, we noted as such here:​https://mikebrandlyauctioneer.wordpress.com/2009/11/15/different-types-of-auctions/

The right for the seller to bid — outside of a forced sale — is dictated by which type of auction is being conducted. In a "with reserve" auction, the seller may bid and in a "without reserve" auction, the seller may not bid.

An interesting phone call came in to us the other day and we’re free to share our thoughts regarding. The issue was the last paragraph (4) of the UCC 2-328. Here are those last two sentences:

Our discussion today regards a [hopefully] somewhat infrequent occurrence at personal property auctions. A bidder registers for the auction, bids, buys, removes, thus taking possession and control of the subject property but doesn’t pay.

The question we tend to get is, “This is theft, right?” We typically answer, “Probably not, and likely only a contract breach.” However, could a contract breach rise to a criminal matter?