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Posted By: Rob

It hasn't been pointed out the Auction Houses are often giving advances for valuable items. Now, suppose the consignor wants a quick loan, but really wants to keep his valuable collectible. The consignor gets his advance and the Auction House gets it's item to sell. The Auction House will set a low enough reserve to encourage bidding, yet the consignor wants far more than the opening bid. He is definitely going to bid his item up to a level where he either keeps the item to at least a point where the "advance" is less than or equal to what a Pawn shop may offer as a loan, (good luck trying to find a Pawn Shop loaning money for baseball cards) or bid it up to a level where he would had been happy to had sold it on his own.

There is absolutely no reason for an Auction House to discourage this activity, as it brings them both rare items as well as higher commissions. There's at least one reason for Auction Houses to encourage this activity: high reported prices bring out more rare material to be auctioned, which is the reason for those big full page color ads from auction houses with their "realized"prices, which may or may not be real.