How a luxury auction works, from estimate to hammer
Catalogue, viewing, registration, bidding, payment: a calm walk through the life of a lot at a sale of jewellery, watches or art.
An auction room can feel like theatre: the rostrum, the paddles, the auctioneer’s rhythm and a sudden silence before the hammer falls. Behind the performance, though, sits a clear and well tested process. Once you understand it, a sale of jewellery, watches or art becomes far less intimidating, and far more enjoyable.
The catalogue and the estimate
Every sale begins with a catalogue. Before the auction the house publishes a description of each , usually with photographs, notes on condition and history, and a low and a high estimate. Most catalogues now appear online as well as in print, so you can study them at leisure.
The estimate is the specialist’s view of what the lot is likely to fetch. It is not a promise, and it is not a valuation in the insurance sense. Some lots sell well above the high estimate when several bidders want them; others fail to reach the low one.
Read each lot description closely. The words chosen by the house, and the order in which details appear, often tell you how confident the specialists are about maker, date and origin. A description that names a maker plainly says something different from one that hedges.
Catalogues also set out the conditions of sale and explain the terms the house uses in its descriptions. These pages are easy to skip, yet they apply to every lot in the sale, so read them carefully at least once.
Reserves, and why you never see them
Most lots carry a : a confidential minimum price agreed between the seller and the auction house. It is normally set at or below the low estimate. If bidding does not reach the reserve, the lot goes unsold, and the figure itself is not disclosed.
The reserve protects the seller from parting with a valuable object for far less than it is worth on a quiet day. For buyers it means two things. Opening bids below the low estimate are not necessarily a sign of a bargain, and a lot that seems to be going cheaply may simply not sell.
Viewing and condition reports
Before the sale the house holds pre-sale viewings, where you can see the lots in person and often handle them. For jewellery and watches this is the moment to look closely: try a ring on, check how a bracelet’s clasp closes, compare the colour of stones in daylight and ask the specialists your questions.
If you cannot attend, request a condition report. It describes wear, repairs, replacements and any issues the specialist has noticed. Condition reports are worth reading carefully, including the small print, because a catalogue photograph will never show everything.
Viewings at the large houses are usually free and open to the public, and you do not need to be a registered bidder to attend. They are also an education in themselves: seeing many comparable objects side by side is one of the quickest ways to understand quality.
Registration and the four ways to bid
Registration comes first. You give the house your details, often with identification, and receive a paddle number or access to online bidding. Then you choose how you want to take part. For high value lots a house may also ask for financial references, so allow a few days if you are new to a particular saleroom.
- In the room: you raise a numbered paddle when you want to bid.
- By telephone: a member of staff calls you during the sale and bids on your instructions.
- Online: you follow the sale live and bid through the house’s platform.
- : also called a commission bid, left with the house in advance with your maximum.
The auctioneer opens each lot, takes bids in steps called increments and calls out the current price, often switching between the room, the telephones and the internet. When nobody wants to go higher, the hammer falls and the lot is sold to the last bidder. For an ordinary lot the whole exchange often takes only a minute or two.
Behind the performance, though, sits a clear and well tested process.
Hammer price, premium and price realised
The hammer price is the winning bid. It is not what you pay. On top of it, the buyer pays a , a percentage of the hammer price that is usually tiered, so different rates apply to different portions of the price. Applicable taxes are then added as well.
The total is often called the price realised, and it is the figure most houses publish in their results. When you read about a record sale in the press, it is usually this total, not the hammer price, that makes the headline.
Because premiums and taxes vary between houses and countries, two identical hammer prices can produce different final bills. Always check the rates printed for the sale you are bidding in, rather than relying on what you paid somewhere else.
After the sale you receive an invoice. Payment is due within the period set out in the conditions of sale, and only then is the lot released to you for collection or shipping. Read those conditions before you bid, because they also cover storage, guarantees and what happens if something goes wrong.
The houses behind the rostrum
The large international auction houses include Christie’s, founded in London in 1766, and Sotheby’s, founded in London in 1744, along with Phillips and Bonhams. Each holds specialist sales of jewellery, watches and art in several cities, and many regional and national houses run excellent sales of their own.
Whichever house you choose, the steps are the same: read the catalogue, view the lot or ask for a report, register early, decide your limit and bid calmly. The theatre is real, but so is the method behind it, and the method is what protects you.
Glossary
- Lot
- A single item or group of items offered for sale under one number in an auction.
- Reserve
- A confidential minimum price agreed between seller and auction house, normally at or below the low estimate.
- Buyer’s premium
- A percentage of the hammer price, usually tiered, that the buyer pays in addition to the winning bid.
- Absentee bid
- A bid left with the auction house in advance with a stated maximum, also called a commission bid.
Questions readers ask
Can I bid if I cannot attend the sale?
Yes. Most houses let you bid by telephone, with a member of staff calling you during the sale, or online through their own platform. You can also leave an absentee bid, also called a commission bid, with your maximum before the sale begins. Whichever method you choose, register in good time, because houses may need to check your identification first.
Why do some lots sell far above their estimate?
An estimate is a specialist’s expectation, not a limit. When two or more bidders want the same lot very much, competition can carry the price well beyond the high estimate. This happens most often with rare objects in fine condition, pieces with a distinguished provenance or a strong story, and works that come to market only rarely.
