SUBJECT: BEWARE Steve Verkman, Keith Vari, Leland’s, Clean Sweep & Paragon auctions

[rand1com]

Originally Posted by mannequin1

I was going to stay out of it but I changed my mind.

I was good friends with Joe from the mid 80's to the early 2000s. I saw a good chunk of his stuff. He had the best Rusty Staub collection in the world, virtuallly everything that existed that he could get.

About 90% of his collection is Rusty Staub. It includes multiples of every Topps card, all the Topps Test issues such as the 68 3D (I think he had 2 or 3 of them), Action Stickers, Discs, Punch-out, Greatest Moments you name it, he had at least 1 of each.

He had several original Jerseys, bats, balls, gloves, a zillion autographed items including mostly photos. You name it. if it was Staub, he had it.

I always thought it was insane that someone could be so obsessed with one player, especially a non hall-of-famer and I knew when he eventually sold the collection most of it would be hard to sell.

He should have gotten 100% or more for all the "cream" in his collection, but all the photos, newspapers, etc. I could see him getting only 50% at most due to the sheer volume.

Phil G

Rusty Staub was a very good player and has a following.

However, other than game used items and the few rare cards you mentioned, his value is very limited, especially in volume.

His regular Topps cards other than his rookie have little value.

His autograph is cheap on virtually anything as he signed a ton over his post playing career.

If the collection is truly 90% Staub related, it will be very difficult to sell at any high level, again other than key items.

It takes a LOT of very good Rusty Staub items to get to 6 figures and my guess is he sold most of his game used items himself or consigned them to an auction house.

[bigfanNY]

I found out a couple more facts about this as Joe is a friend of a friend. Joe has not cashed any advance checks, but already got a bill saying he owed 16% interest on the advance until it is paid off. Joe's favorite player was Rusty Staub but his collection is much wider than that. All Joe wants is to get his items back. No checks have been cashed and if Lelands has any real costs he is willing to make them whole. But as of today Lelands has refused. I only met Josh a few times over a few decades but I cannot see him agreeing a customer should be treated like this.

[BobbyStrawberry]

Originally Posted by ajjohnsonsoxfan

Think this is my very first time over in the "water cooler" section. Didn't really know it existed until now. lol. Might have to wander over here more often.

Its a fun place! I think I spend more time in this section than the main one

[Gorditadogg]

Originally Posted by jingram058

It's also a country club comprised of very wealthy arm chair "sea lawyers" who know everything about everything. If you're not in the club, or go counter to the club's unwritten rules of buying and selling very expensive (pocket change to them) graded cards they just ignore you.

No one can ignore you, James.

Sent from my SM-S906U using Tapatalk

[mannequin1]

Originally Posted by bigfanNY

I found out a couple more facts about this as Joe is a friend of a friend. Joe has not cashed any advance checks, but already got a bill saying he owed 16% interest on the advance until it is paid off. Joe's favorite player was Rusty Staub but his collection is much wider than that. All Joe wants is to get his items back. No checks have been cashed and if Lelands has any real costs he is willing to make them whole. But as of today Lelands has refused. I only met Josh a few times over a few decades but I cannot see him agreeing a customer should be treated like this.

As time went on, he collected some Yaz, Seaver and Tony Perez stuff too, players he also liked. He could have had some great/rare items of these players as well, but from what I last knew it was probably 90% Rusty Staub items. He used to go to Rusty's restaurant in NYC a lot and get his items signed.

[mannequin1]

Originally Posted by bigfanNY

I found out a couple more facts about this as Joe is a friend of a friend. Joe has not cashed any advance checks, but already got a bill saying he owed 16% interest on the advance until it is paid off. Joe's favorite player was Rusty Staub but his collection is much wider than that. All Joe wants is to get his items back. No checks have been cashed and if Lelands has any real costs he is willing to make them whole. But as of today Lelands has refused. I only met Josh a few times over a few decades but I cannot see him agreeing a customer should be treated like this.

P.S. Jonathan, I remember seeing you and your father Joe set up at the old Paul Gallagher NYC shows in the 70s to 80s.

[sflayank]

looks to me that by the time everything is auctioned off hes gonna owe them money

[jayshum]

Originally Posted by bigfanNY

I found out a couple more facts about this as Joe is a friend of a friend. Joe has not cashed any advance checks, but already got a bill saying he owed 16% interest on the advance until it is paid off. Joe's favorite player was Rusty Staub but his collection is much wider than that. All Joe wants is to get his items back. No checks have been cashed and if Lelands has any real costs he is willing to make them whole. But as of today Lelands has refused. I only met Josh a few times over a few decades but I cannot see him agreeing a customer should be treated like this.

Is it standard practice to charge interest on an advance from an auction house?

[Aquarian Sports Cards]

Originally Posted by jayshum

Is it standard practice to charge interest on an advance from an auction house?

I hadn't realized it when I started out, but I have heard of it being done by a number of auctions, though I certainly don't know if it's a universal practice. We aren't funded like the big boys so we don't do a ton of advances but we haven't charged interest in those cases where we've done them.

It would seem to incentivize NOT bringing the collection to auction in a timely fashion, especially if a time frame isn't outlined in the contract.

[rand1com]

Originally Posted by bigfanNY

I found out a couple more facts about this as Joe is a friend of a friend. Joe has not cashed any advance checks, but already got a bill saying he owed 16% interest on the advance until it is paid off. Joe's favorite player was Rusty Staub but his collection is much wider than that. All Joe wants is to get his items back. No checks have been cashed and if Lelands has any real costs he is willing to make them whole. But as of today Lelands has refused. I only met Josh a few times over a few decades but I cannot see him agreeing a customer should be treated like this.

How can you payoff an advance you never took?

Something is weird in this story!

Literally, many thousands of customers/consignors have been satisfied with the service over the last 35 years from Lelands and Clean Sweep so I guess they will make up their own minds about the validity of this claim.

[rand1com]

Originally Posted by jayshum

Is it standard practice to charge interest on an advance from an auction house?

Advances are popular for big ticket items as they may help bring in the consignment with all other things being equal.

I have gotten them in the past from multiple auction houses and have never paid any interest.

The advance is simply deducted from the consignor's final earnings at auction end.

Obviously, if the proceeds do not cover the advance, the uncovered advance must be returned to the auction house which rarely happens.

[egri]

Is 16% a reasonable rate of interest for an advance? I could probably go to the bank and get a personal loan with a lower rate.

[tiger8mush]

.

[jayshum]

Originally Posted by rand1com

How can you payoff an advance you never took?

Something is weird in this story!

Literally, many thousands of customers/consignors have been satisfied with the service over the last 35 years from Lelands and Clean Sweep so I guess they will make up their own minds about the validity of this claim.

Whether he cashed the check or not, he did get the advance as far as the auction house is concerned.

[jayshum]

Originally Posted by Aquarian Sports Cards

I hadn't realized it when I started out, but I have heard of it being done by a number of auctions, though I certainly don't know if it's a universal practice. We aren't funded like the big boys so we don't do a ton of advances but we haven't charged interest in those cases where we've done them.

It would seem to incentivize NOT bringing the collection to auction in a timely fashion, especially if a time frame isn't outlined in the contract.

I thought the same thing about possibly slowing down the items being auctioned if there's interest being charged. Also, there's nothing in the contract that was posted to indicate interest on the advance. In fact, it says no additional fees so interest really doesn't make sense.

[egri]

Originally Posted by jayshum

I thought the same thing about possibly slowing down the items being auctioned if there's interest being charged. Also, there's nothing in the contract that was posted to indicate interest on the advance. In fact, it says no additional fees so interest really doesn't make sense.

That's why I was hoping there was more to the contract than what has been posted, because what has been posted so far is a real mess.

[rand1com]

Originally Posted by jayshum

Whether he cashed the check or not, he did get the advance as far as the auction house is concerned.

I assumed he returned the check to them. Maybe not.

[Exhibitman]

The auctioneers knew exactly what they were doing. Under NY law 16% is the most you can charge w/o committing civil usury. Maybe legal but not a good look, guys.

[BobbyStrawberry]

Originally Posted by Exhibitman

The auctioneers knew exactly what they were doing. Under NY law 16% is the most you can charge w/o committing civil usury. Maybe legal but not a good look, guys.

Yikes. Yeah, that's not a good look at all.

[Peter_Spaeth]

Originally Posted by BobbyStrawberry

Yikes. Yeah, that's not a good look at all.

Especially on a sum that in context to the AH is negligible.

[BobbyStrawberry]

Originally Posted by Peter_Spaeth

Especially on a sum that in context to the AH is negligible.

Agreed.

[conor912]

Originally Posted by BobbyStrawberry

I haven't had any personal interaction with the parties involved, but it sure seems like OP ended up with a very bad deal. I can't imagine getting only 60% of the proceeds of my collection from an AH.

Say you have an item with a fmv of $1000 and you consign it to an ah with a 20% bp and a 20% consignor fee. If a buyer is willing to pay fmv, that would but his high bid at $833 and change. Then 80% of that would be the consignor’s cut…in this case $666, or 67%. So 60% of the hammer, plus a cut of the bp, plus help with grading fees seem about right to me…but what do I know.

[Peter_Spaeth]

Originally Posted by conor912

Say you have an item with a fmv of $1000 and you consign it to an ah with a 20% bp and a 20% consignor fee. If a buyer is willing to pay fmv, that would but his high bid at $833 and change. Then 80% of that would be the consignor’s cut…in this case $666, or 67%. So 60% of the hammer, plus a cut of the bp, plus help with grading fees seem about right to me…but what do I know.

Nobody charges seller's fees any more, do they? At least not in the sports auction biz.

[conor912]

Originally Posted by Peter_Spaeth

Nobody charges seller's fees any more, do they? At least not in the sports auction biz.

Well that’s the best thing I’ve heard in a while!

[jayshum]

Originally Posted by Peter_Spaeth

Nobody charges seller's fees any more, do they? At least not in the sports auction biz.

Considering the OP posted a screenshot from the Clean Sweep website saying the following - "We charge a 10% commission on all items that sell for $500 or more and 15% for lots that sell for under $500." - I'm not sure that's an accurate statement. Maybe on items of high enough value it's true, but probably not in general for everything.

[Republicaninmass]

Originally Posted by conor912

Well that’s the best thing I’ve heard in a while!

Nobody consigns anymore, its too busy

[Neal]

The AH needs to undo this or join the discussion. Seems there is some confusion regarding details and, as previously stated, it isn't a good look at all.

Sent from my SM-G998U using Tapatalk

[gunboat82]

Originally Posted by Peter_Spaeth

Nobody charges seller's fees any more, do they? At least not in the sports auction biz.

Last year, I reached out to Huggins & Scott to inquire about consigning these cards:

1928 Tharp's Ice Cream Babe Ruth #6 (Throwing) SGC 1
1928 Tharp's Ice Cream Lou Gehrig #26 SGC 35 (2.5)
1933 George C. Miller Jimmie Foxx SGC 1.5

I was told that their standard commission is 20% from the seller (on top of the 20% buyer's premium they receive), but they would reduce my fees to 5% only if I gave them all three cards to sell.

Originally Posted by Huggins Rep

It’s our posted standard commission. Given the quality of the three items and being a first time consignor; we would offer to reduce your rate to 5%. Certain collections require a higher commission than others. Several variables go into what commission we offer sellers, which is a case by case basis.

Someone from SCP Auctions reached out to me unsolicited on this site and tried to get me to consign through him with a 10% consignor fee (down from his standard 15%), leaving me with only 90% of the hammer price:

Originally Posted by SCP Rep

Standard is 15%, but in this price range, have been able to get that down to 10%. Even lower if very high priced cards. Got 5% for a 52 Mantle SGC 2, for example

Originally Posted by Gunboat82

To be clear, that's a 10-15% seller's commission on top of the buyer's premium?

Originally Posted by SCP Rep

10% max when working with me. And yes, i was only quoting you what comes out of your proceeds. The buyers premium is where SCP makes its money, promarily, which is why zero sellers commissions are fine when price of item is high enough

So, yes, there are auction houses charging seller fees if they can get away with it, even for marketable cards that are already graded/authenticated.

[notfast]

I can’t believe more people aren’t focused on how poor the document is.

You can’t tell me that the pictured contract is acceptable. Now there’s interest on the advance? Is that written on another piece of paper we don’t see?

Auction company and representatives can have all the history and positive experiences in the world but that contract is amateur at best and intentionally poor at worst.

[theshowandme]

Can I get the cliff notes of this thread in 5 bullets or less?

[bnorth]

Originally Posted by theshowandme

Can I get the cliff notes of this thread in 5 bullets or less?

Someone in the hobby is trying to make money off another person in the hobby.

[Peter_Spaeth]

Originally Posted by bnorth

Someone in the hobby is trying to make money off another person in the hobby.

LOL. What he deserved for that request.

[gunboat82]

Originally Posted by theshowandme

Can I get the cliff notes of this thread in 5 bullets or less?

• OP has big collection, needs to sell at a difficult time in his life, and consigns to Leland's/Clean Sweep with 60/40 split of proceeds

• OP now thinks that 40% seems high and wants to rescind the consignment

• OP produces what purports to be the actual consignment agreement, but it's handwritten and leaves out a lot of potentially material terms, including a schedule of items to be sold, leading to uninformed speculation about what is actually being auctioned and what OP is supposed to receive

• OP was given a $15K advance, and it appears that he may be expected to pay interest on that advance at a rate just shy of the usury threshold.

• Leland's/Clean Sweep responded by proxy and defended the agreement as standard in light of the work involved, and the thread was moved to the Watercooler section to minimize the visibility and potential reputational damage.

[jayshum]

Originally Posted by gunboat82

Last year, I reached out to Huggins & Scott to inquire about consigning these cards:

1928 Tharp's Ice Cream Babe Ruth #6 (Throwing) SGC 1
1928 Tharp's Ice Cream Lou Gehrig #26 SGC 35 (2.5)
1933 George C. Miller Jimmie Foxx SGC 1.5

I was told that their standard commission is 20% from the seller (on top of the 20% buyer's premium they receive), but they would reduce my fees to 5% only if I gave them all three cards to sell.



Someone from SCP Auctions reached out to me unsolicited on this site and tried to get me to consign through him with a 10% consignor fee (down from his standard 15%), leaving me with only 90% of the hammer price:







So, yes, there are auction houses charging seller fees if they can get away with it, even for marketable cards that are already graded/authenticated.

Thanks for posting some actual information about what AHs charge for commissions. Clearly it's negotiable so contacting multiple AHs makes sense. So many people like to say that sellers shouldn't pay anything to an AH, but that doesn't look to be accurate unless you have a very high priced or highly desirable item.

[Peter_Spaeth]

Originally Posted by jayshum

Thanks for posting some actual information about what AHs charge for commissions. Clearly it's negotiable so contacting multiple AHs makes sense. So many people like to say that sellers shouldn't pay anything to an AH, but that doesn't look to be accurate unless you have a very high priced or highly desirable item.

If someone has to pay a seller's premium on top of having their take reduced by the buyer's premium, makes even less sense in many cases to consign to an auction house, IMO.

[jayshum]

Originally Posted by Peter_Spaeth

If someone has to pay a seller's premium on top of having their take reduced by the buyer's premium, makes even less sense in many cases to consign to an auction house, IMO.

Sure, there are other avenues a seller has, but they all have pros and cons. Not everyone wants to deal with trying to sell things themselves. Even if they do, finding the way to get the most exposure to the right people can be challenging. Posting on net54 is free but what percentage of the card collecting community does it actually reach?

[Peter_Spaeth]

Originally Posted by jayshum

Sure, there are other avenues a seller has, but they all have pros and cons. Not everyone wants to deal with trying to sell things themselves. Even if they do, finding the way to get the most exposure to the right people can be challenging. Posting on net54 is free but what percentage of the card collecting community does it actually reach?

IMO for any non-elite cards there are better ebay options which is what I do. Exposure not an issue obviously.

[jayshum]

Originally Posted by Peter_Spaeth

IMO for any non-elite cards there are better ebay options which is what I do. Exposure not an issue obviously.

Ebay obviously works for a lot of people, but there are also plenty of complaints posted here about it. Like I said, there are pros and cons to every method of selling. It comes down to what an individual seller is most comfortable with.

[rand1com]

Anyone who thinks auction houses can survive on a 20% BP with no seller fees is naive. Maybe a very small operation with low OH could but I doubt it.

Of course, if you consign a single $100K item, they will give you no fee and possibly half of the BP because they do virtually nothing for $10K on their end.

It all depends on the amount of work and expense they incur that establishes any seller fees.

In this case, based on minimal known facts, it appears a lot of time and money would be spent to bring the collection to auction. Is 40% unreasonable. Not in my opinion and yes, I realize it is in the minority on this forum.

The consignor certainly had the right to refuse the offered terms and negotiate with other auction houses but did not choose that route before signing the dotted line on this contract and now thinks he was mistreated.

We can always come up with excuses for making bad decisions but most of us have to live with them. It is called a life lesson.

[G1911]

Originally Posted by bigfanNY

I found out a couple more facts about this as Joe is a friend of a friend. Joe has not cashed any advance checks, but already got a bill saying he owed 16% interest on the advance until it is paid off. Joe's favorite player was Rusty Staub but his collection is much wider than that. All Joe wants is to get his items back. No checks have been cashed and if Lelands has any real costs he is willing to make them whole. But as of today Lelands has refused. I only met Josh a few times over a few decades but I cannot see him agreeing a customer should be treated like this.

Can we get the proof of this claim? The contract he produced has no mention of 16% interest rates on the advance. A follow-up contractual agreement, a copy of the bill, or similar documentation is needed. Did he of his own free will, though regretted now, sign an agreement to take a $15K advance at 16% interest, or is he receiving bills for an absurd interest rate he never signed anything agreeing to? Either way, this should be quick and easy to prove if true.

[Peter_Spaeth]

One thing that may be informing people's opinions that the fee was unfair is this claim by the OP:

I have already been contacted by another auction house telling me if I am successful getting the collection returned they would take it on consignment and give me 100% of the hammer + a percentage of the buyers premium.

[Aquarian Sports Cards]

Originally Posted by rand1com

Anyone who thinks auction houses can survive on a 20% BP with no seller fees is naive. Maybe a very small operation with low OH could but I doubt it.

I would say it's HARDER for a smaller auction house as we're not taking in 6 and seven figure items that give us leeway on commission on the smaller items.

Originally Posted by rand1com

Of course, if you consign a single $100K item, they will give you no fee and possibly half of the BP because they do virtually nothing for $10K on their end.

Agreed (well I take minor exception to "do virtually nothing" but I agree with the overall point)

Originally Posted by rand1com

It all depends on the amount of work and expense they incur that establishes any seller fees.

Right. 1000 lots with a value of $100,000 can EASILY take 100 man hours to sell. One $100,000 lot takes an hour, tops.

[jayshum]

Originally Posted by Peter_Spaeth

One thing that may be informing people's opinions that the fee was unfair is this claim by the OP:

I have already been contacted by another auction house telling me if I am successful getting the collection returned they would take it on consignment and give me 100% of the hammer + a percentage of the buyers premium.

If true, maybe he should have contacted a lawyer instead of posting on a baseball card forum.

[Peter_Spaeth]

Originally Posted by jayshum

If true, maybe he should have contacted a lawyer instead of posting on a baseball card forum.

It's hard to assess whether it's credible, seems unlikely given the nature of the collection and the amount of work that would be involved, but who knows.

[gunboat82]

Originally Posted by jayshum

If true, maybe he should have contacted a lawyer instead of posting on a baseball card forum.

He can do both.

[jayshum]

Originally Posted by gunboat82

He can do both.

True, but his first post had this in it so apparently he hadn't at that point which was 2 months after he signed the contract:

1) If you are an attorney and believe you can be of any help please reach out to me

[Peter_Spaeth]

Originally Posted by jayshum

True, but his first post had this in it so apparently he hadn't at that point which was 2 months after he signed the contract:

1) If you are an attorney and believe you can be of any help please reach out to me

Maybe he did before and was told he had no claim, or the lawyers were not interested in the case.

[notfast]

Originally Posted by Aquarian Sports Cards

Right. 1000 lots with a value of $100,000 can EASILY take 100 man hours to sell. One $100,000 lot takes an hour, tops.

Just using this as an example…thats $400/hr for that work that AH would do…Using the terms in this deal.

And then the BP.

[bnorth]

Originally Posted by notfast

Just using this as an example…thats $400/hr for that work that AH would do…Using the terms in this deal.

And then the BP.

Without that how would you expect them to live the lifestyle they do? You don't live like that on $20 an hour.

[Aquarian Sports Cards]

Originally Posted by notfast

Just using this as an example…thats $400/hr for that work that AH would do…Using the terms in this deal.

And then the BP.

Obviously your math is right. My emphasis on EASILY was meant to communicate that it would likely be more hours. Using our auctions as a yardstick we average about 1200 lots per auction and right around $100,000 per auction. We're more likely in the 200+ man hours neighborhood per auction between sorting, lotting, writing, photographing and packing/shipping. That DOESN'T take into account pick up time and expenses, marketing efforts from reaching out to media outlets, doing social media promotion and graphic design for print ads etc. which are all still directly related to that particular auction so it could easily be sneaking up on 300 hours. That's as opposed to just general expenses like advertising rates, rent, utilities, software fees (do people realize that most auctions pay a percentage of the take to the software company they deal with?) etc...

When I do a formal appraisal (for insurance, or legal purposes such as estate situations of divorce) I charge $150/hour and that work is much easier than auction prep.

If it really was two truck loads it was likely a LOT more than 1000 lots, and we don't really have a firm idea on value, but if it's 5000 lots worth $200,000 it changes the math pretty quickly.

The point I'm trying to make is, it's a lot more work than people realize. It's work that also can't be done by just anyone. Believe me we've tried to hire cataloguers and tried to train existing staff, it's a colossal pain. The amount of expense in running an auction is MUCH greater than people seem to believe. People think "Wow, no inventory costs, the business is pure profit." It's just not the case.

We don't have enough good information to determine if this was a fair deal or not, but I have to say (as I've already said) it doesn't sound crazy to me.