what did it cost ,owner at auction

went to a farm auction last week end in Oklahoma terms was 10% buyer premium and with out a Ok tax exempt permit you had to pay 8.38 sale tax so if you was out of state like i was you paid the tax plus buyer premium on a $2000.00 tractor your bill was about $370.00 more . you could see out of state buyer just looking not biding on thing the tax and premium did the sell in as one guy said

I doubt that hurt the auction much. No doubt you will hear grumbling and complaining, but if an item sells for a good enough price, nobody will mind paying the fees. If someone drove from out of state with the intent to buy a tractor, I don't see how $200 in fees is going to sway by more than $200 on their max bid.

I have noticed that estate auction prices seem to be down this year. People have money to spend on bargains, but aren't spending much money if it's not a bargain.

I quit going to auctions when they started that buyer premium. Doesn't the owner pay the auctioneer?

That isn't unlike you buy something that has to be shipped. The buyer has to pay handling fees. You ever go to buy something at a local store and pay handling fees? Of course not! I questioned a seller one time and he said I have to have employees to help me do the order and box it. The local stores also have employees to put things on shelves, check out and so on. Why don't the sellers who have to ship put that cost on the price of their item? Oh, I know the end result might be the same but it just don't seem right. I'll bet if you went and bought a set of spark plugs from your local store, went to check out and he said that will be xxx dollars for handling, that you wouldn't ever go there again. I know I wouldn't.

(quoted from post at 07:24:40 10/06/10) I quit going to auctions when they started that buyer premium. Doesn't the owner pay the auctioneer?

That isn't unlike you buy something that has to be shipped. The buyer has to pay handling fees. You ever go to buy something at a local store and pay handling fees? Of course not! I questioned a seller one time and he said I have to have employees to help me do the order and box it. The local stores also have employees to put things on shelves, check out and so on. Why don't the sellers who have to ship put that cost on the price of their item? Oh, I know the end result might be the same but it just don't seem right. I'll bet if you went and bought a set of spark plugs from your local store, went to check out and he said that will be xxx dollars for handling, that you wouldn't ever go there again. I know I wouldn't.

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When you buy that hypothetical set of spark plugs, you ARE paying for the shipping and handling to get it to that store. You just don't see it on the sales receipt as a seperate charge. Many folks will complain about a $5 or $6 shipping fee, but think nothing of putting $20 worth of gas in the car to see if they can get a better deal at the Wal-Mart in the next town that is 50 miles away.

our local auction does 10% bp as well.

soundguy

Went to one a while back with a 10% buyers premium, 7% auctioneers fee, plus applicable state sales tax (6%) Between that and the shill bidders, not much was actually sold. I never raised my hand once.

Buyer's premium is a way for auction companies to under bid other auction companies to get an auction. They are ridiculous, but what I do is if their is a buyer's premium of 10%, I'll decide what I want to pay for an item, then subract 15%. If I don't get the item, oh well. My way of thinking is that cuts down the overall sale price, thus lowering the percentage amount, going to the auction company.

Too bad you're one of the few that actually does the thinking beforehand...

For most people, "buyer's premium" has too many syllables, and they don't understand what it means... That is, until they get to the cashier and are shocked to find that they owe hundreds of dollars more than they bid!

Auctioneers gotta maintain their high standard of living off fewer and fewer auctions each year. SOMEBODY's got to pay their bills.

I always like it when people bid up on multiple items, thinking they will get them all for one money, and it was clearly called out as choice, meaning that much each. That's another comical situation.

A few auctioneers have tried it here,but didn't catch on. I personally don't usually attend those with premiums.

I was reading this post, and I agree that I don't like buyers premiums.

I wonder, since a lot of things don't make sence until you know the reason, is there some tax loop hole on a state or federal level???????

The buyers premium is simply a tool auctioneers use to make more money. Auctioneers will tell you its a tool used to entice more sellers to consign with them. Here's how it works....
Say an auctioneer charges 20% commission to the seller at a traditional auction. Sellers don't like paying the 20%, so the auctioneer can offer a lower seller commission and charge a buyers premium, but here's the part they don't talk about.....they'll lower the sellers commission to 15% and charge the buyer 10%, so they make 25% instead of 20%!!!!!! Here's something else they don't tell you.....by law the buyers premium is supposed to go to the seller as part of the auction proceeds UNLESS the contract with consignors states otherwise.

I've had this discussion with an auctioneer friend that is a proponent of the bp. He says the lower seller commission helps to lure consignors to bring their merchandise to market. I countered that its the buyers with cash in hand that lure sellers to consign their merchandise.

I go to allot of collector auctions. Auctioneers say they need the additional income from the bp to offset their costs. Of course I look at it differently. Consider the expenses a buyer incurs going to an auction. The auctions I generally go to involve allot of travel, quite often hotel, meals, and travel expenses. The auctioneer's expenses pale in comparison to the buyers collective expenses.

Simply put the bp is BS. If the auctioneers want/need to charge more they should have the balls to tell the sellers they need to pay more.

I ALWAYS deduct the amount of the bp from what I'm willing to pay for an item.

The buyer premium would really hurt them here. I won't go to a sale that has a BP advertised. I've never been asked to pay sales tax at a sale either.

I agree with you guys. An auctioneers BP is BS and I don't go to an auction that advertises that they have it.

If theres a 10% BP, then you simply bid 10% less than what you were going to without it.

To me a buyers premiumis is like Farm Bureau insurance. They want you to pay a extra fee( membership fee) just to buy there insurance. No thanks

Several slime ball auctioneers around here have started doing this. They are promoting it to older people as a way to save money. They tell them that they (the seller) will not have any cost. The buyer pays it all.
A farmer that I did a lot of repair work for had one that way. I know it cost him many thousands of dollars in lower sales prices. The bidders where all standing around trying to figure out how much they had just bid. It broke up the rhythm of the sale. He had a lot of Oliver stuff. I saw two Oliver collectors leave not long after the sale started. They both had been there to look at a real nice Super 55 in original condition with the original purchase order. They lived over two hundred miles away. They had drove down the week before to look at the tractor. They later told me that they had not seen that it was a buyer premium sale. They refused to bid at them. That Super 55 only brought $2200. They later bought a little rougher one in Nebraska for $5200. So you figure it out.

It'll cost the seller my bid. Around here, I'd say 50% of auctions have a BP....auctions I look at anyhow. If they have them, I don't go. I don't care what's for sale, I won't go. I'm smart enough to do the math in my head but I refuse to humor the b@stards that do it.

Name another item you buy that has an additional charge when you go to pay.... taxes don't count. It's not the same as FB insurance either. That is a privlage given to members. You have to be a member to get the insurance........ if you only sign up for the insurance and none of the other benifits, that's up to you.

I figure if you want to have an auction, draw a crowd and have an auction. It's going to cost you whatever % you agree on to do it. If you want to squeeze every penny out of your items, put an ad in the paper and you do the work to sell it.

This is like people buying houses they couldn't afford......... they want it all without paying for it. If this is the end of auctions, so be it, I won't be a part of it.

Tim