How do antiques, cultural relics, and works of art play with the unspoken rules in auction houses?

The appearance of hidden rules in auction houses seems to have become an inevitable problem for major auction companies and collectors. Let’s decipher some of the default unspoken rules of auction houses for everyone!

Unwritten Rule 1: "Chandelier Bid"

At the beginning of the bidding, the auctioneer pretended to see someone bidding in the auction hall, but in fact, there was no one bidding in the direction the auctioneer was pointing. With his hand, he was just pointing at the chandelier on the ceiling.

To this day, "chandelier bidding" is still 100% legal in New York. Current laws allow auctioneers to bid in this false form, as long as they do not exceed the guaranteed reserve price of the auction item, which is the undisclosed reserve price acceptable to the seller.

Unspoken Rule 2: Earn commission from third-party guarantee

When a person puts up a work of art for auction, the auction house will sometimes be willing to provide a third-party guarantee: the auction house will find a third party Agree on a price as a guaranteed floor price, which is not public.

If the final transaction price does not exceed the guaranteed reserve price, the third party needs to buy the auction item at the guaranteed reserve price. This operation is to ensure that the seller has the lowest price. If the final transaction price exceeds the guaranteed minimum price, the guarantor can make a commission from the excess price difference as a reward for the guarantor's willingness to guarantee the minimum price. The excess amount is generally charged a commission of 30%-50%.

Unspoken rule three: "Transaction price" is not equal to the transaction price

Due to the confidentiality system requirements of the auction house, the information of the seller and buyer is kept confidential. If the auction price of the collection is 1 million , then you only need to pay the auction house a 10% commission of 100,000, and the auction house does not care about the real prices of the buyer and seller. Many speculators use commission payments to speculate on their holdings.

Unspoken rule four: Valuations are fictitious, agency fees are real

Small auction houses make money not through transaction service fees but agency fees!

Many small auction houses that engage in illegal activities are like this. They never promote themselves in a big way, and even "shoot once and change places, and then change skins and disappear after deceiving them enough."

Auction house employees often go to some second-hand antique markets to "dig for gold". The specific method is to see someone buying "antiques" and approach them as a staff member of an auction house and talk to them enthusiastically. Encourage them to participate in the antique auction of their company, and take them to their own auction house for free evaluation of the purchased antiques.

Then find some so-called antique appraisal experts and tell the other party solemnly that the antique he just bought is genuine and very valuable. He hopes that he will participate in the auction, and then charge a certain percentage of the intermediary fee.

In fact, the "antiques" purchased by the other party are rarely genuine, but according to appraisal experts, the price suddenly increased several times or even dozens of times. These are all deceitful by small auction houses. The direct manifestation of the trick is that after the other party paid an intermediary fee ranging from several thousand to tens of thousands of yuan, his "antiques" could not be sold at the auction, but the intermediary fee would not be refunded.

Decryption in the next issue: What role does the auction house play in "elegant bribery" in officialdom?