Buyers premium

Along a similar vein, the one I cant follow is a "buyers premium" at auctions.

Was simple years ago, if you handled bloodstock for arguments sake, auctioneers worked in guineas. ( for those who can remember, that was ONE pound and ONE shilling.
Generally accepted that the shilling was the auctioneers commision.
When decimals came in, rule of thumb was you could add five or ten percent as the auctioneers commission, showing my age here!

Seems that the very few auctions that I had been to since then, was nearly always a sign at the auction, or in the auction book, " add auctioneers commission,( be it 5 or 10%)".
AND, GST will apply ( or not).
So just where did this or when did this " buyers premium" slip in??
As I said, prolly only been to the one auction in yonks, can't recall any "premium".

If I understand it, it's just another "tax" imposed on the purchasers jacking up either the GST or the auction houses fees?

Dunno if I got that right, maybe you guys who do a bit of buying/selling in this era can explain it to an old simpleton?
Dave_64

Dave 64 brought this up in Lang’s post re GST.
Clearing sales conducted by farm supply agents do not usually charge a buyers premium in WA.
The recent sale of a tractor collection auctioned by an Eastern States firm quoted 12 1/2% premium plus GST on that. Presumably the vendor would have paid a similar amount so on the over one million dollar result a tidy commission.
The auction was well run with bidders at the site, on the internet and telephone, with bids showing as they occurred.
If my sums are right buyers premium an extra $137.50 on each $1,000 bid.
David.

What is a buyers premium anyway ?
It was a city thing I that crept out to rural areas with covid and on line auctions and clearing sales, something I absolutely hate is online clearing sales

No more jaw boning and catching up with people

Sadly for grumpy old buggers like me I think the farm clearing sale is a thing of the past

But I am serious as what is a buyers premium


Paul

Mrsmackpaul wrote:

What is a buyers premium anyway ?

But I am serious as what is a buyers premium


Paul

Paul, Most auction Houses who charge a "Buyers Premium" Charge the vendor a bit less Commission & make It up with their Buyers premium..

But happy to be corrected..

I really don't know for sure Paul, i have always assumed that the agent gets whatever percentage the "buyers premium" is advertised as (calculated on the hammer price of each lot sold), as their commission, and the vendor then gets the hammer price (often plus gst) without paying any further commission to the agent, but that is purely my own assumption.

I tend to avoid sales with a "buyers premium", so i really don't know.

Brett.

Hayseed types faster than me! I think his answer is probably more accurate than mine.

Brett.

Hay seeds answer is only warm from what my mate tells me about his recent sale. Agent pockets buyers premium plus what ever price he can gouge out of vendors pocket, set fee or percentage, and what did they do for their slice..... not much, some miss labeled photos, some (in my opnion) poor advice about lots and lot sizes..... but job is/was done.... end of story.

I should add buyer premium has been about at least 10 years in my orbit with some less popular auctioneers. And my recent experience with an on line farm auction was ok, I got my usual junk lts for ok price, auctioneer chatted to me and other bidders in usual way to get extra bids, bit surprised to be asked by name if I wanted to go one more.... I did.

Buyers premium is just a rip off the auctioneers have dreamed up.....when it started around 1980 ,it was never over 3-5%.....has gradually crept up to some charging 20% or more now.........i believe that originally ,the state government used to auction their own stuff ......the public trustee had a full time auctioneer.........then the auction co s said we ll sell your stuff without any comission (govt stuff was and is a big drawcard),but we must be able to charge the buyers the comission........and it took off from there...........on private stuff ,they charge 25% comission plus 20% buyers fee ........i havent been to an auction since the premiums came in .......and I used to spend up to $10k a month at auctions.

Buyers commission has always been used by top end auction houses in the art world. eg Sothebeys, Christies
I advocate people use Auctionsplus as that is a platform that was designed for agricultural trading, especially livestock and the agents using it have to get special training and be licenced by the platform and demonstrate integrity (as they are selling between each other not just to mug punters). The use of auctionplus for clearing sales took off during covid and there is no buyers premium.

Buyers premium is a real hate of mine. I bought an item from an online auction by a well known Melbourne auction house. They charged me 16 1/2 % buyers premium, which is 15% net of GST. In a conversation with them about getting the item freighted to me I asked what the deal was if I wanted to sell through them.....same thing, 16 1/2 %. So from each $1,000 of sale price they pick up a handy $300, nice work if you can get it. Most of the online auctions do something similar, although they do drop the premium to 9% or so for big ticket sales. Further to that excess, many times the items are poorly described or incorrect, and the couple of things I have purchased had damage not noted in the advertising. I would much prefer an old fashioned live auction, but if you want something and it is online local or interstate there is no option.