Auction sales: what are the seller and buyer’s fees?
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Auction sales: what are the seller and buyer’s fees?
In order to be remunerated, a Sales House levies a sales fee. Both buyers and sellers are subject to this. These fees are expressed as a percentage and are calculated with reference to the amount of the auction.
Here are a few guidelines to help you better understand its costs.
You can also find our articles on the deposit, the reserve price and the auction.
Fees: remuneration of the Auction Houses
While the fees may seem large and burdensome to you, it should be noted that they are the main source of remuneration for the Houses of Sale. Thus, the fees you pay as a seller or buyer are used to pay for the various stages of preparing a sale: creating the catalogue, advertising, managing social networks, but also staff, premises, sales assistants and computer equipment. They are therefore necessary for the smooth running of a sale.
When buying at auction, it is essential to remember that buyer’s fees will be added to the auction price. For example, if a Louis XV period chest of drawers is sold at 3,000 euros during the auction, you will have to pay 3,000 euros + the corresponding buyer’s fees.
These fees vary according to the Houses and the types of sales, and can be as much as 30% (including tax) of the auction amount. Let’s take an example: let’s imagine you buy a bottle of Château Pétrus at an auction price of 1,000 euros and that the buyer’s fee is set at 25% including tax. In this case, your costs would be 25% of 1,000 euros: 250 euros. You will therefore have to pay the Auction House 1,000 euros (auction price) + 250 euros (amount of the fees): 1,250 euros.
Note that in some cases the fees are “degressive”, i.e. they decrease in steps. For example, the fees can be set at 30% (incl. VAT) for auctions between 1 and 50,000 euros ; 25% (incl. VAT) for auctions between 50 001 euros and 100,000 euros ; and 20% for auctions above 100 001 euros.
Finally, it should be noted that additional costs may be incurred if you purchase a lot online. Indeed, some online auction platforms are not free of charge. If you choose to bid via one of these platforms, additional fees may be charged by the auction house. In this case, the total amount of your slip will be calculated as follows: the auction price (e.g. €1,000) + buyer’s costs (e.g. 25% of the auction price including VAT, i.e. €250) + internet costs (e.g. 3% of the auction price including VAT, i.e. €30). You will then have to pay 1,280 euros to the auction house. Because of these potential additional costs, our experts advise you to be careful when you choose to bid online.
In any case, the amount of the fees is indicated in the general conditions of sale, available either in the sale catalogue or online. The auctioneer will also remind you of them at the beginning of the sale. They cannot be negotiated under any circumstances and are in principle obligatory for everyone. When you are considering a purchase at auction, it is therefore essential to find out about these buyer’s fees to avoid any disappointment.
As a matter of principle, the proceeds of a sale go to the seller of the work in question. However, a percentage of the proceeds is deducted by the Auctioneer for his remuneration. This is known as the seller’s fee.
Selling costs: definition and operation
These are calculated on the basis of the lot’s tender price. Please note that this is the hammer price. This precision is essential: If you would like to know the proceeds of the sale of your work, you should not consider the buyer’s fees. Let’s imagine, as an example, that you are the seller of the bottle of Pétrus. The latter was sold for 1,000 euros at the hammer. As the buyer’s costs are 25% inclusive of tax, the total amount of the sale will therefore be 1,250 euros for the auction house and the buyer only. In fact, the buyer’s fees are only intended to remunerate the Auction House: they do not concern you. Only the auction price, in this case 1,000 euros, is taken into account to calculate the net amount of the sale, i.e. the amount you will receive. It should be noted in this respect that the majority of auctioneers communicate the sale prices “(buyers) fees included”. Therefore, please bear in mind that the amount indicated is higher than the amount you are entitled to, in order to avoid any misunderstanding.
Selling costs are established at the time of signature of the sale mandate. They can reach up to 20% of the hammer price. Let’s take an example: you have a fee of 18% including tax and you sell a watercolour by the artist Eugène Boudin at 10,000 euros at the hammer price. In this case, the Auction House will charge you 18% of 10,000 euros: 1,800 euros. You will therefore receive 8,200 euros for the sale of your watercolour.
Note that these fees are subject to negotiation (unlike buyer’s fees). As such, the more valuable your item is, the more the Auction House will be interested in putting it up for sale. You will then be able to negotiate your seller’s fees downwards. For exceptional objects, the costs may even be zero. On the other hand, for items of small value or very common items, it will be less easy to negotiate the fees.
If these seller’s fees are provided for in the sale mandate, it is important to note that additional fees may be added.
The Auction House may charge you for various costs it has incurred in connection with the sale of your objects: transport costs, expert’s fees, costs of obtaining a certificate of authenticity, etc.
It should be noted that these additional fees are subject to negotiation.
Legal taxes may also be added to your seller’s fees. There are two types of taxes: “droit de suite” and capital gains tax.
In some cases, the costs can be onerous, especially for the seller. As such, our experts advise you to go through a broker such as Mr Expert.
On the one hand, this solution allows you to opt for a private sale rather than an auction. The private sale allows you to drastically reduce costs, thus increasing the net amount you will receive from the seller. In this respect, the broker can take care of finding potential buyers for your object.
If you would like to sell by auction, going through a broker can also be useful. The broker will negotiate your fees on your behalf. His experience of the art market will then enable you to optimise your net seller.