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Thoughts on buyers premiums
#772746 Fri Dec 24 2021 08:16 AM
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Was reading a different thread that mentioned a buyers premium...didn't want to hijack the thread so thought I would ask the question about buyers premiums here.

The older I've gotten I think I agree with them more and more. If an auction house needs/wants lets say 30% ... why shouldn't that fee be split between both parties? Seems unreasonable that the seller should take the whole hit. Maybe it's an age thing, I'm getting closer to selling ... earlier I mostly was just a buyer.

Last edited by Ohio Oil; Fri Dec 24 2021 08:17 AM.
Please use For Sale forums to sell

Please - NO offers to Buy or Sell in this forum category

Statements such as, "I'm thinking about selling this." are considered an offer to sell.
Re: Thoughts on buyers premiums
Ohio Oil #772751 Fri Dec 24 2021 12:59 PM
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seller isn't taking the whole hit, buyer is already paying a high percentage

auction house charges both seller/buyer a percentage + the (tax man - first of year on auctions)

this percentage has gotten so high it doesn't seem feasible too go this route

sell too a private party (cash) & cut out the auction house & tax man

when the dust settles you've lost close too 50% of your investment (a no brainer) .. ... cool


RANDY
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Re: Thoughts on buyers premiums
Ohio Oil #772757 Fri Dec 24 2021 04:36 PM
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There is no doubt in my book as well that you should go the private route. You will be upset otherwise, when the dust settles. It is out of control the fees these days.

Re: Thoughts on buyers premiums
Ohio Oil #772764 Fri Dec 24 2021 06:26 PM
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If I was selling I wouldn’t really mind the buyers fees. But as a buyer some places are charging 20% & then add 7% tax and it makes a good deal not soo good!

Re: Thoughts on buyers premiums
Ohio Oil #772864 Sun Dec 26 2021 09:31 AM
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I used to buy and sell farm and construction equipment and hated buyers fees even as a seller! It made many buyers hesitant to bid as they would have otherwise. At many of these auctions the receipts were well over a million dollars. I'm not going to pay 10% over the bid for something I'm going to resell later and have to pay 10% again to sell.


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Re: Thoughts on buyers premiums
Ohio Oil #772865 Sun Dec 26 2021 09:59 AM
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Ok so if selling a collection thru an auction house is not financially the best way to go then if we decide to sell how would you liquidate thousands of items some valuable some not so? and if you leave your valuables to your children what advice are you going to give them?

Re: Thoughts on buyers premiums
Ohio Oil #772867 Sun Dec 26 2021 12:03 PM
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As those of us who've been at this awhile are finding as we see life's finish line on the horizon, it has been "easy" (and fun) to accumulate a good-sized collection a few pieces (or many pieces) at a time, multiplied by years and years of activity, And, of course, there's that goal all of us collectors have....we want to maximize the value we receive, when selling the treasures we amassed over the years. Yes, disposing or even the thinning of a big collection is hard work and time-consuming. Many collectors in our hobby simply aren't willing, interested, or perhaps able to do a lot of piece-meal sales, when looking to dispose of their collection. The task can be daunting. Plus, some of us may not have the ability to price the pieces we're selling, so we're comfortable we haven't "left too much money on the table". So, enter the auction houses. They provide a service that fills a need. Kind of like the Realtor that may wind up selling a home we own, or a financial advisor that we pay a fee to. .

I am NOT carrying any water for an auction house. I'm only offering the opinion that they do provide an avenue to have a large collection "go away" in a relatively short timeframe. Yes, you have to pay for this benefit, but as many of us are starting to see there are no painless or simple alternatives.for achieving the same result. Again, I'm NOT advocating that using an auction house is the solution. But, it is one viable way to solve the "problem" we've been discussing. By now, it should become obvious as we think about this topic, there's no easy way out, unless a person can find one or a few collectors to absorb the entire collection. And, to make that work, and at a decent price, you better have some very interesting pieces.

The bitter truth may be that some of us need to rethink the value of our collection, when attempting to dispose of it. Yes, we may think of it as being worth XXX dollars. But, is it, once you factor in the cost of eventually having to market it? I guess I'm thinking that some of us may feel better about the cost of disposal, if we come to think of it as yet another, eventual expense of our collecting activity. You know, like the travel cost for going to swap meets, meals and hotels for the far away events, the shipping we paid on some purchases that were mailed to us, etc. In closing, did I say this yet?.....I'm not advocating the use of an auction company as the only way to address this issue! Good luck, and Happy New Year to all. John

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Re: Thoughts on buyers premiums
Jolly-John #772981 Tue Dec 28 2021 08:39 AM
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Well said John .
Originally Posted by Jolly-John
As those of us who've been at this awhile are finding as we see life's finish line on the horizon, it has been "easy" (and fun) to accumulate a good-sized collection a few pieces (or many pieces) at a time, multiplied by years and years of activity, And, of course, there's that goal all of us collectors have....we want to maximize the value we receive, when selling the treasures we amassed over the years. Yes, disposing or even the thinning of a big collection is hard work and time-consuming. Many collectors in our hobby simply aren't willing, interested, or perhaps able to do a lot of piece-meal sales, when looking to dispose of their collection. The task can be daunting. Plus, some of us may not have the ability to price the pieces we're selling, so we're comfortable we haven't "left too much money on the table". So, enter the auction houses. They provide a service that fills a need. Kind of like the Realtor that may wind up selling a home we own, or a financial advisor that we pay a fee to. .

I am NOT carrying any water for an auction house. I'm only offering the opinion that they do provide an avenue to have a large collection "go away" in a relatively short timeframe. Yes, you have to pay for this benefit, but as many of us are starting to see there are no painless or simple alternatives.for achieving the same result. Again, I'm NOT advocating that using an auction house is the solution. But, it is one viable way to solve the "problem" we've been discussing. By now, it should become obvious as we think about this topic, there's no easy way out, unless a person can find one or a few collectors to absorb the entire collection. And, to make that work, and at a decent price, you better have some very interesting pieces.

The bitter truth may be that some of us need to rethink the value of our collection, when attempting to dispose of it. Yes, we may think of it as being worth XXX dollars. But, is it, once you factor in the cost of eventually having to market it? I guess I'm thinking that some of us may feel better about the cost of disposal, if we come to think of it as yet another, eventual expense of our collecting activity. You know, like the travel cost for going to swap meets, meals and hotels for the far away events, the shipping we paid on some purchases that were mailed to us, etc. In closing, did I say this yet?.....I'm not advocating the use of an auction company as the only way to address this issue! Good luck, and Happy New Year to all. John

Re: Thoughts on buyers premiums
Ohio Oil #772983 Tue Dec 28 2021 09:39 AM
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Good point Randy. It is the tax man that can really Make the difference now. Like a bee sting after the initial hit.


Craig
Re: Thoughts on buyers premiums
Ohio Oil #772985 Tue Dec 28 2021 02:20 PM
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Along those lines, Craig: I didn't want to put this in my reply above, since I thought it was a little morbid. However, if you're doing an auction sale of your collection, about the only way to avoid the capital gains tax (state and federal) is to be DEAD. So, we're really talking about your family or your estate in this case. After you pass, your collection of goodies will receive an immediate stepped-up cost basis to the current market value of your items. As I understand it, if your estate or family holds an auction to liquidate your collection relatively soon after your death, they will not have capital gains taxes to pay on the auction proceeds. In essence, the auction proceeds for an item also becomes the current market value of the item...subtract the one number from the other, and you get "0". So, there was no capital gain.

Also, the family will not have to worry that you kept no records (or ***** records) about what you initially paid for the stuff in your collection, since that's not a factor, given the automatic step-up in cost basis.

NOTE: I'm not an attorney or a CPA. Just trying to convey a few of the generalities that may be applicable for some of us. Everyone would be responsible for contacting their own estate attorney or tax preparer to figure this out, of course.

Re: Thoughts on buyers premiums
Ohio Oil #772987 Tue Dec 28 2021 04:33 PM
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Good info. I'm fairly new to gas pumps, but, I've been around the antique car hobby for over 55 years! I've been to a lot of auctions over the years and have noticed a few things that are worth sharing. The biggest mistake I've seen families make is to let cousin Waldo's wife's uncle's son handle the sale because he owns an auction house here in town that has an auction every week. I may miss a rare item, but, mostly thee sales are a waste of my time . Better, but, still not great is to get an auction company that is used to going to farms, estates, businesses, etc, and has a mailing list and will provide some publicity. Sometimes they may mention "antique car," or even say "55 Chevy and many parts," If nearby, I'll try to go on the "inspection day" and check it out. There's usually not much good stuff, but, I have found some rare, great finds mixed in with a box of junk because the sell didn't know what the items were, and he was placing what he thought were like items together to be sold in lots. The best is an auction company that knows what they are selling, or is willing to find, or let you find an expert to advise. They will know how and where to market the sale. I've driven hundreds of miles to try to buy a part or car that I needed . These will cost the family more, but, the proceeds will be better if you have a good collection.


mikieb
Re: Thoughts on buyers premiums
Ohio Oil #772989 Tue Dec 28 2021 05:46 PM
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Over these thirty years of collecting, I have been to more auctions than I can remember. I never left without buying something....otherwise....it became a lost day and travel expense. Always paid a buyers premium but never sales tax. A federal resale tax number, eliminates this. I try to resell all of my inventory.....I still have a collection that is applicable to this dilemma. This issue has been on my mind as well. I agree with all the above information. My only thought is that, try as I might to sell the last piece that I have, on the day before I die, it probably will not work out? LOL! My family has some understanding of the value but not the desire to handle a piece meal sale. It would take too much time dealing with serious buyers and of course the tire kickers, who will talk a good line but that's all. I have decided that when the time comes, I will be using a reputable auction house that I have used for years. It is centralized. Draws from both coasts. Has the extensive list of clients. And is quite knowledgeable in these items with pricing. I have bought and sold thru them for years. As with all auctions, you might sell a few things, underbid, but the overall average leans to the seller. Good auction houses advertise a lot. They stage the auction. Supply and pay their help. Pay the workman's comp. and liability insurance. Make the sale and settle within 10 business days, as a rule. As a business, this kind of service deserves to be compensated. Using a quality house makes all the difference. The seller pays 10-15% usually. For me, it is the best way to settle quickly with as little trouble to my kids. Just my opinion. Paul www.severngaspumps.com

Re: Thoughts on buyers premiums
Ohio Oil #772991 Tue Dec 28 2021 06:51 PM
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Couple of responses referred to the tax aspect if you go the auction route. The reality, economic policies moving forward is that even with cash transactions its going to be difficult to inject that money back into your portfolios without 'the tax man' taking notice.


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