Replacing Mystery with Transparency & Trust
Many people perceive the auction profession through the comedic lens of motion pictures and television. Scratch your nose and you'll be the unwitting owner of some expensive bauble you cannot afford and never wanted. Fail to show up in a black tie and tails and they won't let you in the door. Auctioneers talk too fast. Many myths abound, most implying the bidder is at some sort of disadvantage to the slick, auctioneer hustler. As if from a 19th century melodrama, when it comes to bad guys, it seems the auctioneer is right up there with the much-maligned rent collector, or congressman, in our cultural psyche.
As inaccurate as the myths are, auctions houses nonetheless encounter their lingering fallout: client mistrust. Heritage Auctions is doing something about it. Through our policy of transparency, bidders at Heritage can be fully confident that the auction marketplace we provide is fair and evenhanded. Nowhere is that better displayed than in the Heritage policy regarding so-called chandelier bids, those bids called by the auctioneer that protect the consignor's minimum acceptable hammer price.
For example, at auction if the bidding for a lot has reached $5,000, but the reserve placed on the item by the consignor is $6,000, the auctioneer is duty-bound to protect the consignor. To do so he will call out $5,500, even though no one raised his paddle. In so doing, the auctioneer is inviting another bid from the floor, which, should one come, would then reach the reserve. If no one else bids, the lot won't sell.
Some auctioneers historically have protected the reserve in this manner while implying that an actual bidder exists. They point to a wall or chandelier and thus invent an imaginary "gentleman in the back". Such practices have been criticized as creating an auction atmosphere of intense interest in a lot, when in fact no such interest exists. There have also been cases where a few unscrupulous auctioneers have continued to take such "chandelier" bids, even after the reserve has been reached, running up the bid. Such practice is patently illegal, but with the reserves historically kept confidential by auction houses, how are the bidders to know?
Heritage Auctions was the first, and still the only, major auction house in the world that discloses all reserves a week before the auction. This policy of transparency fosters trust with our clients, who can sell and bid with knowledge and confidence. And as a result, ironically, it has actually resulted in higher prices, on average, for our consignors.
The trust relationship that estate attorneys offer their clients should not end when a third party appraiser or auctioneer is brought in to handle estate tangibles. By adopting our policy of transparency, making our complete auction archives available to the public and not participating in chandelier bidding, Heritage Auctions has become the most trustworthy choice for all fiduciaries and their clients.
Postscript: So troubling is chandelier bidding, that the State of New York has proposed legislation requiring auctioneers to say "for the consignor" when making such a bid. The Heritage policy of full disclosure seems an even easier solution. We urge every other auctioneer to follow our lead.