Sothebys / SportsCards plus catalog came -- are "Reserves" nomral?

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Posted By: Harry

After browsing through all of the great stuff in my Sothebys catalog, I skimmed through their "conditions of sale." I never knew that there were unpublished reserves in these auctions. I can understand a minimum bid, but not a hidden reserve.

The catalog plainly states "All lots in this catalog are offered subject to a reserve, which is the confidential minimum price acceptable to the Consignor. Sotheby's may implement such reserve by opening the bidding on behalf of the Consignor and may bid up to the amount of the reserve, by PLACING SUCCESSIVE OR CONSECUTIVE BIDS FOR A LOT, OR BIDS IN RESPONSE TO OTHER BIDDERS."

If I understand this correctly, you could very well be bidding against a hidden reserve and not against another actual bidder. I know that it does not really make sense, but I like having the comfort knowing that when I win something there is another bidder one increment below me.

How would you like to be bidding on Mickey Mantle's first home run ball or the T206 Wagner, feeling that you are competing with another bidder when in fact you are bidding against a hidden reserve?

Is this normal -- am I making too big of a deal out of this? To me an auction should not have hidden guarantees made to the consignor. The bidders should know the real reserve / minimum bid.

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Posted By: DD

My understanding, and I may be wrong, is that Mastro does the same thing. This is not bothersome as the item would not sell anyway if the person(s) bidding does not meet the reserve.

The problem with this is that no distinction is made in the reported results of the auction. You cannot tell what sold and what did not meet the reserve. This can artificially inflate the price of the item(s) the next time they are up for auction, if the reserve has not been met. I'm sure we have all muttered at some point, "did you see what that sold for in Mastro's auction?" The problem is it may not have sold.

As I stated above, this is what I have been told. Can anyone support or refute this?

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Posted By: Hal Lewis

I agree with you.

Why not just TELL US the reserve?

I guess because they don't want to be embarrassed if NOBODY bids on their "big ticket" items due to the reserves being too high.

Heck, I will consign ALL of my collection to Sotheby's ... and put reserves on everything that are 300% above market price.

If anything sells ... GREAT!!

If not ... GREAT!!



In fact, the MORE that I think about this ... the more it angers me ...

because it is a BOGUS way for Sotheby's to "PUMP UP" their auction and make it look "special" ... when in reality the T206 Wagner may not really even be "in play."

In other words, they may have convince the owner to let them "borrow" the card to hype-up their auction ... and it may have a reserve of $2,000,000 on it.

Just a way for them to make it LOOK like they are the "Big Cheese" of the auction world.

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Posted By: Gilbert Maines

Is there a substantial difference in this approach compared to shill bidding?

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Posted By: HW

most recently Mastro and Robert Edward. I inquired if I could set a reserve on my item (even a stated reserve) and they both told me that their opening minimum bids are the same as their reserves. If someone opens up a lot at the minimum bid then it will be sold.

I guess that I could always have a friend buy the item back for me if I am not happy with the price, but then I would be responsible for both the buyer and seller fees.

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Posted By: leon

The other major auction houses that we normally deal with have reserves that ARE the opening bids. There are millions of ways around this for the sellers but the reserve is generally the opening bid. As always if you only bid what you are comfortable paying then you will never be hood winked (is that a word or did I just make it up?) later

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Posted By: HW

about only bidding what you are comfortable with paying. That makes logical sense, but I am not usually that logical when it comes to auction bidding.

To me, I like the comfort factor of knowing there is someone else as crazy as I am. Late at night during the auctions, after all the lots are way past what my original budget was, I still end up bidding a few more times anyways.

If I thought that I was bidding against a hidden reserve instead of another person, I do not think I would be as agressive. I know that this sound stupid to some, but I do not always know what something is worth and it is nice to know that at least one other bidder is willing to pay about the same as I am.

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Posted By: runscott

place a ceiling bid right before the auction close...then go to bed.

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Posted By: warshawlaw

Most states permit the use of undisclosed reserves so long as the fact that an undisclosed reserve may apply is disclosed in the rules, which BTW all of us are SUPPOSED to read before bidding. You read the rules and saw the disclosure, so you are aware of the conditions of bidding. I have no idea whether Mastro uses undisclosed reserves, but if so, it will be disclosed in the auction rules.

Use of an undisclosed reserve is not shill bidding because it is a legal and long-established practice in auctions.

What many of you are thinking of as an archetypal auction is simply another form of auction called an "absolute" auction, where the item sells regardless of the bid and without reserve. In many collecting fields, absolute auctions are not the norm.

Concerns about overinflated reserves are unjustified. There is no way that an auctioneer will accept an item with a grossly inflated reserve. Remember, these people are in the business to make money, which they do via commissions on stuff that sells. If I try to consign a $1,000 card at a $3,000 reserve, the auctioneer will refuse to handle it because it would waste his time.

I do not consider a reserve, disclosed or otherwise, to be problematic as a bidder because I always bid what I want to pay and no more, and assume I will pay the max regardless of the status of my bids. I never stay up late babysitting an auction; if my best isn't enough, so be it. Remember, auction fever is a disease and those of you who catch it need help

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Posted By: Hal Lewis

PEOPLE ... I'VE GOT AUCTION FEVER...

AND THE ONLY PRESCRIPTION...

IS MORE COWBELL !!!

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Posted By: Rhys

You have to be careful with reserves in major auctions. I do not know what the policy is with Sports, but in other collectible areas there is a substantial fee involved for no sales. My father was one of the Nations Leading collectors of Lionel and American Flyer Toy Trains. He consigned some big ticket items to Christies about 10 years ago and they offered to put reserves on them, which he did. What they did not tell him is that they charged their same 20% fee whether the item sold or not and it was based on the reserve price. My father ended up paying about 5K just to have some of his items returned to him which did not sell in the auction. I doubt this is the norm for sports, but it would not surprise me if some sort of fee was involved to the consigner if they choose a reserve and the item does not sell.

Rhys

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Posted By: barrysloate

First of all Hal, cute reference to a funny SNL skit. That aside, regarding reserves in the Sotheby's auction, my understanding of the auction law as it pertains to New York is that the highest legal reserve they can have is equal to or less than the low end of the estimate. Thus, the highest reserve they can have on the Wagner is $375,000. They may start it lower, and between the start price and $375K, you may have no idea what is going on, but once it hits $375K it is fair game and they legally can not influence the sale. The owner can always have a shill in the audience, but that is out of Sotheby's control. No, it can not be reserved for $2 million as you posit based on the estimate. I think Sotheby's has gotten in enough trouble in the last few years that they will certainly want to abide by the law. So I would be more worried about well heeled bidders than what's going on behind the scenes. I don't let my consignors bid in my own auctions, but if they want to have a friend bid for them, there is no way to control it and for that matter no way to know it is going on. I just advise bidders to go to their highest level and put blinders on regarding all the extraneous stuff that may or may not be going on.

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Posted By: hankron

I agree with the others that it's nice knowing you're bidding against flesh and blood instead of a machine plugged into the wall. If you pay way too much at MastroNet you're comforted knowing that at least there were two idiots involved not just you. And it's hard to resell that lot to the underbidder when the underbidder's a machine.

On eBay, you get to know your regular cyber competitors. There's a 20 year old female college student in Wales of all places who has a same very particular interest as me. When a particular item shows up on eBay, it's going either to Seattle or Wales. I've talked to her a couple of times and she's personable and bright enough, but you can bet it chaps my hide each time I lose out to that girl with a Welsh accent. I've been waiting a long time for her allowence to run out, but that hasn't happened. I'm starting to worry that her parents are doctors.

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Posted By: andy becker

barry is correct, the reserve must be at or below the low estimate. if the estimate looks goofey, the lot is not really for sale. mastro does not use reserves but does allow you to bid on your own lots. you do pay the 15% juice if you win your own lot.
i would second the idea, bid what you want to pay...not a dollar more and get away from the auction.
ALL (read EVERY SINGLE AUCTION INCLUDING EBAY) auctions are suceptable to hidden reserves, shill bids, etc...

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Posted By: Scott Bob

Okie.... So.. the reserve for the Ruth's bat is 1M otherwise it won't be sold. Good luck on that.

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Posted By: warshawlaw

That's not much comfort to me when i do something idiotic.

BTW, got my Lipset lot today. Very happy w/the cards.

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Posted By: Julie

1m FOR A BAT, AND THE wAGNER IS OUT OF MY REACH,--SO WHAT'S SO GREAT ABOUT THE sOUTHEBY'S CATALOGUE?

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Posted By: Brian H (misunderestimated)

for many people (myself included this time)..... the Catalogue itself !

It's one of the nicest catalogues around: Great pictures and descriptions of great items that..... I'm probably not even going to try to win...

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Posted By: Judge Dred

I didn't realize that Mastro had reserves. The one reason I like their auctions is because they start at a reasonably low level and then they let the auction take it's natural course. Am I wrong about this?

Why have a reserve? If you're going to sell the item just start the auction at the lowest price (the reserve price) that the consignor feels like accepting. I guess the one benefit of having a reserve is that you can find out what the bidding public thinks the item is worth even if it doesn't sell.

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Posted By: JimB

1) I don't think Mastronet has reserves, other than their very low minimum bids.

2) Though it will probably sell for an astronomical amount anyway, that the estimate for the Ruth bat is 1 million does not mean that is the reserve necessarily. If you read the auction rules, it means that the reserve will be no more than one million. It could be anything below that conceivably. Of course it is way out of the price range for 99% of us regardless; even if they had no reserve, it would probably sell it that range... just thought I would clarify. It is always good to read the auction rules.

JimB

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Posted By: Scott Elkins

After reading a few books on Brian Daniels Illegitimate Grandfather - Arnold Rothstein, I didn't know anybody in New York went by a "law" - even the people sworn to protect it! Anyway, I don't think Mastro does this reserve deal. I know when I have consigned to them, they like to start items LOW and let the bidding begin. Their reasoning was that it attracts more bids and potential bidders. I totally agree. I believe the T207 Red Cross I consigned to them started out at only $500 - ended up having more bids than any item in the auction at 30 bids!

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Posted By: Scott Bob

Any news of how much that Ruth Bat and Wagner sold for yet???