Heritage Auctions - Reserve pricing 0

[Stefanomjr]

So the concept, based on my assumption, is simple enough. I assume if the art has a reserve price and that price is met before the reserve price deadline...then the art piece doesn't go to live auction and the hammer drops. Is that correct? If so, can HA change their minds on the artwork designated with a reserve price? I was tracking a few pieces in the current auction that had a 5/9 deadline at 7pm PT. When we got within a few hours of the deadline I noticed the artwork was changed to "no reserve" - feels sketchy. 

 

What am I missing? 

[vodou]

2 minutes ago, Stefanomjr said:

So the concept, based on my assumption, is simple enough. I assume if the art has a reserve price and that price is met before the reserve price deadline...then the art piece doesn't go to live auction and the hammer drops. Is that correct?

No, everything still goes to live auction.

3 minutes ago, Stefanomjr said:

When we got within a few hours of the deadline I noticed the artwork was changed to "no reserve" - feels sketchy. 

Not sketchy. HA posts all reserves (as "one bid under" with asterix) or "no reserve" at the same time, all reserve issues are resolved pre-live. I think. Somebody want to correct me?

[Stefanomjr]

44 minutes ago, vodou said:

No, everything still goes to live auction.

Not sketchy. HA posts all reserves (as "one bid under" with asterix) or "no reserve" at the same time, all reserve issues are resolved pre-live. I think. Somebody want to correct me?

Yeah my fundamental understanding was way off ...I called HA. They admitted there isn't much of anything explaining the reserve system on the website. Per my conversation: everything does go to live auction. However if there is a reserve price (lets say $2,000) and prior to going live the winning bid is $1,999 - the system throws out all the bids under the reserve price. 

 

Also, all lots (I was told) initially get posted with same status:  "Reserve (If Any) Will post on xx/xx/xxx xpm CT" 

[tth2]

Reserve just means a minimum price--the piece will not sell at auction if no one is willing to bid at least the reserve price.  But it's not a guarantee that you'll win it at the reserve price--it's not a BIN.

[cstojano]

Let's be clear, the intent here is to make people think the piece has been bid up to this level, or at least conceal where the bidding had reached prior to the reserve setting. The alternative is the hidden reserve where you bid against the consignor up to the reserve, which I think should be illegal because you don't realize you are bidding against no one. 

[pemart1966]

On 5/10/2019 at 1:56 PM, Stefanomjr said:

Yeah my fundamental understanding was way off ...I called HA. They admitted there isn't much of anything explaining the reserve system on the website. Per my conversation: everything does go to live auction. However if there is a reserve price (lets say $2,000) and prior to going live the winning bid is $1,999 - the system throws out all the bids under the reserve price. 

 

Also, all lots (I was told) initially get posted with same status:  "Reserve (If Any) Will post on xx/xx/xxx xpm CT" 

If the reserve is $2,000 then how can $1,999 be the "winning bid"?

[tth2]

6 hours ago, pemart1966 said:

If the reserve is $2,000 then how can $1,999 be the "winning bid"?

"Winning bid" isn't really the right word, more like "highest bid".

Before the reserve is announced, the online bidding looks like online bidding for any other auction.  So if a person put in a $1,999 bid, the listing would show that the highest bid is currently $1,999.

But then once the reserves are announced, if they're higher than the current highest bid, then the current highest bid is wiped off and the auction just lists the reserve price and indicates that a bid of at least that amount is required to have an active bid.

So using Egyptian Queen as an example, prior to the reserve being disclosed, the online bidding quickly jumped to around $2.6m or thereabouts, and that amount held until the reserve was announced.  Then once the $5m reserve was announced, all of the previous bids disappeared and the only next bid that matters is the one that will trigger the reserve.  

[NicoV]

4 hours ago, tth2 said:

Then once the $5m reserve was announced, all of the previous bids disappeared and the only next bid that matters is the one that will trigger the reserve.  

Take it easy, don't push the little button!