Regency Superior Auctions

Just won a few lots in the Regency Superior auction at the St Louis stamp show by bidding on their website which does not allow for real time internet bidding. Every lot that I won was awarded at my maximum bid level. This has happened a few times in the past with other auction firms. All of these firms claim that their policy is to award lots at the next bid level over the next highest bid, but ending up at my max price seems to happen with increasing frequency.

Obviously I would not set my maximum bid at a level where I was not content to win the lot, but the frequency at which I'm winning lots at that max is causing me to wonder whether these firms are adhering to their stated policies. They obviously have a goal of maximizing the proceeds for their selling clients (and therefore their own revenue) but not at the expense of violating their own policies which would drive away customers such as myself without which they would have no auction.

I would be curious as to other folk's experience with these types of auctions, particularly with Regency Superior. Thanks.

I had the same thing happen to me back in 2010. I bid on five lots from Regency and all five went to my maximum bid level. I've talked with others who dealt with Regency and said the same thing has happened with them if they bid via computer or mail, but not if they bid in person.

I don't have enough experience with remote bids to Regency to be able to support or contradict your experiences. A potential cure is to use an auction agent. If prices are being pumped up to your maximum, bidding through an agent is likely to save money even after deducting agent fees.

Clark

This screams for testing but would take a bit of luck. You would have to have a buddy attend live and bid at the opening bid, have no other bidders or only low bidders, and your bid in place at just above the opening bid plus a higher maximum. If they don't sell to you at one step above your buddy but go to the max, then it's time to consider a class action. The buddy would have to be a bond fide collector to avoid a charge of shill bidding.

I have attended several live auctions of other houses and can't remember any instance of them announcing multiple increasing pre bids. They would just announce the lot and say "I have a bid in the book for $400." I take this to be the pre bidders maximum. It would either be out bid in the room, or would sell at that bid. I don't think the fast pace allows them to actually do the stepping up that you are expecting.

Chris

It should not be the pre-bidder's maximum. It should be the lowest raise for the highest bidder among the prebidders. (I probably didn't say that right.) Floor bidders would then be bidding against the book (highest bidder), no?

Bid should be one increment above the second lowest bid. If there is no competition, there may or may not be a reserve. If no reserve it is within policy to sell at your maximum. Cheesy, but that's the rub with an "unreserved auction." It's not actually to the benefit of the buyers. And frankly, there is no such thing (IMHO) as an unreserved auction. There is always a silent minimum.

I would suggest requesting IN WRITING the policy of the auction house as to lots with one bid placed. What determines the lowest bid? If you don't like the answer, you will know not to bid with that firm.

Actually, no, they don't (all).

Last October, I asked the rhetorical question: What Means 'Reserve Price'?

https://goscf.com/t/40092

Regency-Superior's rules then stated:

"It may be assumed that all lots are subject to a reserve price. The auctioneer may implement such reserve price by bidding on behalf of the seller."

To me, it is a very different thing to:

1) have a reserve price that is not reached in actual bidding amongst one/more bidders and, therefor, the lot is passed, versus

2) have the auctioneer bid as the only other bidder until a reserve price is reached.

Of course, what you are talking about goes one step further: the extraordinary coincidence that exceeding the reserve price by one increment also requires that you reach your maximum bid.

I know that I have become much more reserved in my bidding - and have contented myself to not buying many a lot - because I am reluctant to trust that a hard'n'high maximum will only require me to pay one increment above one other real bidder.

At this point, people often make the point that you should know the market well enough to bid 'correctly', eg, to set a maximum bid that is well & truly the maximum you are willing to pay and, therefor, be a price that you are not unhappy to pay.

This sort of Homo Economicus nonsense appeals to people who are desperate to avoid dealing with the fact that we are social animals. We did not develop the interest & ability to participate in discussions like this one out of autonomous rational self-interest but, rather, out of being born & raised into a social environment by socialized people who, in turn, socialize us.

Therefor, it is perfectly human to take pricing signals from the market and from other buyers, and to resolve to pay just one increment more than anybody else (Relativism rearing its ugly head).

When our maximum bids keep turning-out to be just the tiniest bit above everyone else's maximum, we start to look for an explanation other than, say, our finely-honed bidding instincts and encyclopedic understanding of the market place always leading us to pick a maximum that is just one bid increment above everyone else.

If we were that good, we should be trading commodity futures & options, not stamps.

Cheers,

/s/ ikeyPikey

More auction houses than we like to think are ripping buyers off.

I am an after auction buyer now or a res bidder.

The auctioneer is typically telling the consignor (through the signed contract) that they will sell their material for the highest possible price. At the same time, they're typically telling bidders (through their terms and conditions) that they will buy the material at the lowest possible price.

Both things can't possibly be true. IMO, this is a clear conflict of interest, one that exists with every auctioneer in every field.

Auction houses handle this conflict in various ways. "Many" establish some estimate of fair value (sometimes published in the catalog, sometimes internal only, sometimes an "on the fly" guesstimate as the lot is selling.) If you give a house your maximum bid and it exceeds this "estimate," they will often bid your proxy competitively (i.e. hammer price will be one increment over second highest.) If your maximum does not exceed their estimate, they will "protect" the consignor (i.e. hammer price will be your maximum bid.)

Opening bids are also handled in a variety of ways. For instance, if a house estimates a lot at $500 and gets a proxy bid of $10,000, it's not unusual for that lot to open and close at $5,000, even though the next highest bid may have been $300. Again, IMO they're only attempting to balance this obvious conflict of interest. Just understand they are NOT representing YOUR best interest (or you would have won for $325,) nor are they representing the consignors (or it would have sold for $10,000.)

I'd be very interested to hear about the legal cases (I'm sure there are a number of them) where this conflict is challenged, and how the courts address it.

For me, the fact that this conflict of interest exists is enough reason to "never" give my maximum bid to an auction house. I will bid live, or via telephone, or via agent. I will not tell the house how high I'm willing to go, because that knowledge can (and often does) influence everything from the opening bid to the final hammer price.

P.S. There are honest houses out there where you can give a bid and they will open it at one increment above 2nd high, then bid it competitively, no matter how high/low that is. IMO they are in the minority.

My goal is to buy at the lowest price. That is accomplished by not revealing my bid until as late as possible.

For live public auctions, I use an agent. The savings more than offsets their small fees for being your eyes and ears. Why tip off the auction house days in advance to your maximum bid? Failing to use an agent is just asking for trouble.

For ebay, use a bidding program. Why tip your maximum until the last second? Or go tit-for-tat all week long and have the bid gradually driven up? Again, the savings far exceeds the small cost of the bidding programs, and I don't have to tie up my time watching for lots to close or forgetting to bid.

As much as I detest suggesting things for other people to do with other people's time and other people's money, it would go a long way towards shoring-up faith in the system if the reserve bids were deposited (before the auction catalog is released, and before the bidding opens) with a third party, eg, the ASDA. After the auction closes, they, in turn, could charge a buck to check a price.

What I suspect we all fear is that the reserve price is fluid, and is reset according to the pre-auction bidding. I am not willing to engage in faux cynic accusations, only to generously allow that 'some' auctioneers are honest, but I do think that a little transparency would put this to rest.

'What if we gave an auction and nobody bid?' Reserve prices have a legitimate role to play in the system. That role is to protect sellers, not to screw buyers or to maximize commissions. I would understand auctioneers being reluctant to expose reserve prices to competing auction houses, as the reserve prices are, in a sense, the auctioneer's bid to the seller. But keeping the reserve bids completely & forever hidden is costing the hobby, too.

Cheers,

/s/ ikeyPikey

Shermae is exactly correct. The "silent mimimum" is designed to protect the seller from serious financial harm and is actually a law in every state under the UCC - that sellers have the right to be protected from excessive losses and the auction house has the duty to do so **OR** it's a reserve placed there by a professional consignor (Regency has quite a few, as do most larger firms. Without them, the sales would be much smaller in size). So to "bulk up" the sales, material is sought from pros. In return, the pros get special selling rates and also are generally allowed to set their own reserves. This is all a "normal" way of life in public auctions and buyers who believe that the old-fashioned notions of how to coduct an honest auction still exist, are sadly kidding themselves.......

Another fantastic thread! A couple of questions:

What % is paid to an auction agent? Do the auction agents examine the lots that you are interested in bidding in and is that included in the % paid? What happens if you are unsuccessful with your bid? Do you owe the auction agent a fee or is that only paid when a lot(s) is purchased?

What is a rough percentage estimate of "recycled" dealer material with reserve at a typical auction?

I know it is tough to name names, but someone care to rank auction houses on an "honest" meter?

Bob

There is interesting reading in Forbes on this subject. This is ad-supported content.

http://www.forbes.com/sites/richard...-background/

http://www.forbes.com/sites/richard...-at-auction/

http://www.forbes.com/sites/richard...nts-for-you/

http://www.forbes.com/sites/richard...uying-right/

http://www.forbes.com/sites/richard...p-selection/

(Edited to add a fifth link, the first in order above)
The links are in chronological order starting in November 2014.

CJ

These are great links.

Thanks

Bob

Like most of you, I've noticed - not always, by any means - a "coincidental" knock-down of an item to me at my ceiling price. In terms of information, the UK site I use most often always shows an estimate. It will have a reserve, which only becomes evident after the sale if an item hasn't sold, and becomes available on a first-come, first-served basis. That reserve isn't, in my experience, far below the published estimate. The house also states that lots won't be sold for less than 75% of the estimate.