Auction company policies

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Posted By: Jim Clarke

Let me first say that this has NOT happend to me and during my drive back from the beach I had this notion pop into my head. I know that there are reneggers on lots during almost any auction. My first question is what happens to that lot? Get offered to the underbidder, another source without paying commission, or back to the consignor? My second and more curious question is, Do they cancel all the bids placed by the renegger on all the lots, thus making some lots lesser amounts for winners? IE... If a renegger is the underbidder on 3 lots than he pushed up the eventual winner... How many times has an auction company told a winner that you still won the lot but for less money????

JC

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Posted By: Frank Evanov

Has happened to me once....Mr. Mint called me a month after an auction and sold me the lot for my bid.

Frank

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Posted By: Judge Dred (Fred)

I somehow doubt that the auction houses would give back any money because they cancelled the bids on a person that renegged on another lot. I would guess that they might offer the lot to the underbidder for their bid because a 10% increment bid wouldn't hurt them too much. They get about 30%+ commission coming and going...

I've picked up lots at the minimum bid with no buyers premium associated because the auction ended with no bids.

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Posted By: Jay

It seems to me that the only fair thing to all concerned is to offer the lot to the underbidder at what he would have won the lot for if the renegger had never bid. The difference between that amount and the "winning bid" should be the amount that the auction company should sue the renegger for. The case should be pretty simple and that would keep the consignor whole. Also, the renegger's name should be publically disclosed so other auction houses know about him and hopefully remove him from their mailing lists.

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Posted By: Cat

The fine print of almost all the auction houses states that if a bidder renegs on a bid that they may sell to the next highest bidder and then go after the first bidder for the incremental difference (inclusive of the vig, legal fees, etc. etc.).

The cancelling of the the underbidder bids from renegged bidders seems to be an unspoken and unwritten thing the DOES NOT happen.

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Posted By: Judge Dred (Fred)

You'd have to figure out that nobody would know if a renegger was an underbidder in an auction - so, all's well that end's well...

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Posted By: Griffin's

This situation has come up on me twice.
The first time I was the underbidder, and was offered the lot for the amount of my max bid. I argued that since the top bidder wasn't legit then all of his (since I know it wasn't Julie or Joanne) bids should have been cancelled and I get it for the increment over the 3rd guy. Not even close. Take or or leave it for my max, and I took it.
The other time something different happened. I won a lot and paid for it, and while I was waiting for it to be shipped the very same cards (same certs) popped up in another auction houses catalog. Turns out a lot of auction houses have the policy that in the case of a non paying bidder the lot can either A. Be offered to the underbidder B relisted or C sent back to the consignor. The auction house assumed B, and listed the item(s). In reality the consignor opted for C and sent it to the other auction house. In the end the one I won it for went above and beyond to make the situation right, but it does show that non paying bidders aren't a totally unheard of occurance.

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Posted By: davidcycleback

The auction house is offering the card at a price to the underbidder. The underbidder can chose not to accept the offer.

As non-bidders may have placed bids if the high bid was lower (the high bidder never bid), it's not always true that a lot would have sold for the final bid minus all the high bidder's bids. It's possible it would have sold for the same price if the high bidder never bid. I've not bid as some had placed the bid I wanted to place. If he had not bid, I would have place the same bid.

MastroNet, as they were called, relisted a lot and printed the name of the non-payer in the catalog description.

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Posted By: barrysloate

I think David's point is correct. If the winning bidder and the reneger had a bit of a bidding war at the end, they likely knocked out all other bidders. If the reneger didn't bid, a third bidder would have probably taken his place and the lot would have gone for roughly the same amount. I have in the past offered a lot to an underbidder at his top bid and if he responded he might have gotten it for a lot less, I simply tell him that it just going back to the consignor. He has no obligation so he is free to accept or pass. Because I am not a big auction house, I did not have the resources to hire counsel and sue for the difference. That just wasn't an option. What always upset me most is that auction houses weren't more aggressive in sharing the name of renegers. Once someone reneges, he should be blacklisted from as many auctions as possible.