Nowadays when you buy a certain item, it’s original cost is a lot cheaper that its presently priced. It happens everywhere: malls, thrift shops, luxury boutiques and even in auctions.
Buyer’s premium is a term used in an auction. It is described as the added percentage that a bidder needs to pay once he has bought an item. It’s money kept by the auction house, not by the seller.
To learn more about this practice, continue to read below.
An Illustration of Buyer’s Premium
Say a vintage chest was sold to you for $500. In the end, it’s not all you’re going to pay for. If the buyer premium is set at 10% then you’ll need to pay $510. Some auction houses would already have the VAT included in the 10% but sadly, more of them have it excluded.
In auction houses such as Christie’s and Sotheby’s, it’s normal to have buyer’s premium. In storage unit auctions though, it’s something that’s not normally practiced. This means there are certain units auctioned off with a buyer’s premium on hand.
Why is it unnecessary for storage unit auctions?
The essence of a buyer’s premium is that it’s supposed to cover the inventory and catalog efforts of the auctioneer. Storage units on the other hand, find no use for it. Why?
The storage units are the auction houses itself. There are no efforts needed to make an inventory of it, much less make a catalog. That’s why a lot of professional bidders refuse to participate in auctions that have buyer’s premium included. They just deem it as pointless and unnecessary.
What if you’re suddenly charged with it?
If you’re charged with a buyer’s premium in a storage unit auction, you should ask questions. You need to ask them why they charged you because really, there’s no use for it in this kind of auction. Whatever you paid for to have the unit, that should be it.
Buyer’s premium are considered a rip off, even in auction houses. So be aware of it to save yourself from any costly troubles.