I just won my first item from a Heritage Auction. When I completed my payment, they sent a list of coin which they say didn't sell. But I remember many of those receiving bids and no indication they had not reached a Reserve figure. My question is whether this indicates they act as their own shill bidder to raise the prices and offer those which they got stuck with. Why is this important? If I was the winning bidder at two lower price levels and was facing off against a shill, then I wasn't in a true Auction. If I was bidding against Heritage, then I should be informed. Now perhaps I just don't understand what's happening. This is why I bring it up here where those with more experience can offer me more information. Now I understand that some people do not have a problem with shill bidding and I understand that in theory. Even if you agree with that, is that shill bidding something which should be disclosed. I'm already paying $140 more than the bid after the buyers premium, handling and Texas Sales tax. I hate to think I was the high bidder substantially below the final price and was only bidding against myself.
My understanding of most major auction house, coins included, is they can bid on their own account, it's up to the auction house. So yes, you may have been bidding against them as a shill bid. They can set reserves, bid against you, or bid on behalf of the seller to try to sell the coin.
I'll have to remember this next time. They apparently bid quite highly when they lose nothing by making a bid. I suggest they change the name to Feaux Auction.
If an owner of one of the coins consigned to an auction bids on a coin and wins , wouldn't they have to buy the coin and pay the 17.5% . or does the coin become Heritages property once it's cosigned to an auction . Thanks in advance .
You agreed to their terms of service when you registered to bid. They would not have executed your bid without your having agreed to the terms. It is written in the terms what they can and cannot do. In general, they are allowed to bid one time per lot that they own and they are allowed to publish reserves on consigned coins at nearly anytime prior to live bidding.
Been down this road before. No, Heritage does not "shill" bid (although they do occasionally buy coins for themselves if memory serves me). They absolutely do have reserves. This is not typically obvious from their listing I believe, but I do remember seeing it on their auction lists and "live" bidding. In fact, after each major auction they have a section called "post auction buys" for those coins not making the reserve.
Most states in the US have action laws allowing the house to bid on lots and also for the house own lots in the auctions. In other words shilling is not illegal even though a lot of people do not care for it. Me included.
HA will post reserves on lots a couple days before the auction ends. Occasionally, a seller won't submit a reserve until just before the auction ends. They need to pay Heritage a penalty for such actions, but they're allowed by their rules.
It is the post auction buys which clued me in. There were so MANY which had bids and no indication of having failed to meet a reserve, and yet were called unsold.
Heritage is not alone when it comes to reserves on items in their auctions. Consignors also place reserves on the items they own. And there are far more of them. And you need to keep in mind, for about 5 years prices have been steadily dropping - it is a bear market. And in a bear market there are an awful lot of reserves that do not get met in auctions because people are just not willing to take the losses on what they are selling. And, because there are a lot of consignors out there who have no clue about what is going on in the coin market so they set unrealistic reserves. So it should be expected for there to be a lot of unsold items at the end of any auction given the circumstances. Although I probably shouldn't be, I am extremely surprised that people do not understand or are not aware of how auctions work - and I mean any auction, not just Heritage auctions. There is nothing hidden, underhanded or shady going on, everything is disclosed. But you as a participant do have to read the auction terms and agreements to know that. Every auction house there is has items they own in their own auctions. Where do you think the items in auctions come from ? There are only 2 sources, consignors and the auction house. People need to understand how auctions work. In almost every case, when a consignor first contacts an auction house the consignor is given 2 choices. The auction house will offer to buy their collection, or a portion of it, outright. Or, they can consign their items and take their chances. Seller fees, buybacks, reserves, all of that can vary some depending on the auction house or a specific auction, but it is all spelled out in the auction agreements, just like it is for all buyers. But as I said you do have to at least read them to know that. If you just sign the papers without reading them, or just click on I Accept without reading them, then people can only blame themselves if they do not know or are unaware of something.
I just checked my Heritage auction archives. Of 16 winning bids, only 2 were at my max bid and quite a few were not even close. I think I'll continue using them.
Yeah - what Doug said. Plus you can also look through heritages inventory. A lot of the post auction sell is items with a higher price than I am willing to bid. I know the few items I was watching went for more than I was willing to pay - before BP. Now the virtual bourse I think I have bought a couple from there with the make an offer, but not many.
You are pretty much correct. If you consign a coin you can then bid on it in the auction and if you win you pay the full hammer price plus the buyer's commission (17.5% at heritage). In addition, a lot of auction houses charge additional juice to the seller, maybe 2.5% of all lots under $400, so the seller is only actually receiving 97.5% of the hammer price.
If I consigned I would not bid on my own coin - just does not make sense to me. As it stands with the right consignment you can get a flat 5% rate that they charge the seller.
Good information! I have never won an auction on Heritage, but I have bid and made a few offers on coins. I'll be the first to admit that I'm not always good about reading the terms and agreements on the websites I visit, so this thread answered the questions I had (that were similar to the OP's). Thanks for the great information!
Or watch one of those Mecum car auctions on TV, or the chasing classic cars when he tries to auction. You can sometimes see the behind the scenes stuff where the auction house is bidding against a floor bidder to try to reach a price point where the seller will pull the reserve price. People complain about ebay all the time, but it's a true second-price auction system. One other point about how auction houses operate regarding using their auction records as a price guide. Keep this in mind when you see auction results, not all auction results are created equal. Another issue with auction results, suppose you have an auction with 300 large cents, of which maybe 10 pieces are really nice, either rare varieties or really nice condition. It's pretty much guaranteed that the last one of those 10 lots will have an inflated hammer price as all the serious buyers compete for the last 'good' coin.
