As we’ve often noted all over the United States, legally there are [only] two types of auctions: “With reserve” and “Without reserve” also known as “absolute.” We’ve also noted that perception is far more important than reality in the auction business.
Recently, an auction of the Lincoln Park Plaza (Michigan) apparently did not result in a completed sale. Adam Miller, Lincoln Park’s city management coordinator, called the auction a “stunt,” instead of referring to its legal name of “with reserve.” In his opinion auctions are either absolute or stunts? Maybe … but maybe not.
Our topic today specifically regards bankruptcy auctions, but applies equally and reasonably to any type of auction anywhere in the United States. What we’re discussing is the finality [integrity] of the bidding process — i.e. “Does “Sold!” mean “Sold!?”
We are introducing our new Q&A series on art appraisal and insurance evaluation for art lovers who seek an alternative opinion on safeguarding the value of their artwork or collection.
To kick off the series, art insurance consultant Charles Liu(刘泉鋐) of Charles Art / Insurance based in Singapore, offers his insight on various definitions associated with art evaluation.
What is art valuation?
A rhetorical question was recently posed asking if auctioneers can use ‘reasonably advantageous’ terms and conditions (in their contract with a seller, and between the bidders and the auctioneer?) The answer presented was, “yes.” I certainly concur, depending upon your — or the — definition of “reasonable.”
When a company is valued in excess of a billion dollars, it carries weight in its industry. So it is with Zillow, launched in 2006 to serve as an online database of homes to help sellers find buyers and buyers find homes. But Realtors now accuse the company of breaking its longstanding promise not to compete with them after it introduced a new program connecting buyers and sellers direct. They also say this program will cost homeowners millions in equity.
Sotheby’s New York will offer some 100 works from The Collection of Edward Albee in a dedicated auction on Sept 26. The works are touted to offer an insight into the playwright, regarded as one of the greatest creative minds of the 20th century.
The full proceeds of the sale will benefit The Edward F. Albee Foundation, which provides residency stints for writers and visual artists in Montauk, Long Island.
Our question today involves an auction where the auctioneer/seller is charging a buyer’s premium. For example, a lot sells for US$1,000 and with a 10% buyer’s premium, the buyer of that lot pays US$1,100 (US$1,000 + 10%.)
Following the auction, of course, the auctioneer would have to settle the auction with his seller. In doing so, that settlement paperwork would show (should show) the sellers gross proceeds, any expenses and net the seller is receiving.