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twcellist

Discount at Auction?

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I recently met with a representative for an auction house (I won't mention name) and he was saying that at auction you tend to get a significant discount compared to a dealer. For example, he said that a good condition Vuillaume might sell at auction for $250,000, but at a dealer it would be like $700,000. Is there any truth to this?

In my rather short and inexperienced time watching, looking, and observing the auctions I feel like there are a ton of beat up/trashed up old instruments and a lot of pitfalls and ways you can really get screwed unless you really know what you are doing. I don't know if you all share the same sentiment or not. :wacko:

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well I've purchase from lots of auctions in the past.. I stopped for a couple of year's and since last year I began again. I  do have to say, that a several years ago some auction houses wouldn't even accept a violin with cracks ( let alone a sounpdpost crack! unless it was exceptional , but now I have been noticing auction houses (won't drop names) , auctioning off beat up violins that need lot of work! Is it just me noticing this? I doubt they are running out of violins as the supply is massive what gives?

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To the first part of your question, I would think that your interlocutor was “talking his book”.

 

To the second part; The Auctioneers have, over the last few decades, increasingly tried to attract retail customers, and sell instruments needing restoration to retail customers, who underestimate the magnitude of work required, rendering the mythical “auction discount” invalid.

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The first part is of course nonsense. While a really great Vuillaume with impeccable papers might fetch $250k at auction, this is pretty much a retail price. 

The only one I know of that got a higher price at auction (not by much) was part of Bernard Millant's personal collection. 

So like Jacob I would apply a large pinch of salt ...

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That claim is a little bit too peaky for my liking. The theory of auctions for private buyers is that if you 'beat the dealer' you are paying a little more than they are willing to go for, and accordingly make a saving against retail price, but you need to know that you really are 'beating the dealer' for even if you are in the room and you know who the dealer is, you don't know if they are bidding for their stock, or on behalf of a private client. Furthermore, auction can be used to test or to prove the price of an instrument. If the vendor (owner) wants too much for it, it may be put into auction with a spunky estimate so that the real value can be negotiated afterwards. With an increasingly competitive market for good value goods, auctioneers can play this game. The result can be buyers inadvertently paying retail-plus prices. There is no argument that you can win at auction against the dealers, but that comes to knowing your game, and doing proper research before you buy - essentially doing the things that dealers train over years to do. After that, there are all kinds of issues. Do you simply want a Vuillaume for $250,000 because you want a Vuillaume for your investment portfolio, or are you looking for a classy Vuillaume on a par with Hilary Hahn's... as much as anything there are astute reasons why one Vuillaume could be "as little as" $250,000 - or less, and another one could be closer to the $700,000 mark (if it's a cello). These reasons would also be reflected in a dealer's offerings. 

Those are comments for excellent condition, playable instruments with water-tight provenance. Anything less than that, and there is a whole world of questions to be engaged with. Caveat Emptor - buyer beware, or as it is often put "I told you so!" 




 

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14 hours ago, twcellist said:

In my rather short and inexperienced time watching, looking, and observing the auctions I feel like there are a ton of...pitfalls and ways you can really get screwed unless you really know what you are doing.

Besides "impeccable papers" etc. if I was planning to bid in a quarter of a million dollar sale, I'd want to pay my luthier his daily consulting rate and fly him up to New York to look over the instrument...part of the cost of the transaction, trust but verify.  Don't folks do this?

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5 hours ago, Ben Hebbert said:

These reasons would also be reflected in a dealer's offerings. 

Not always, I can think of some violins (including Vuillaumes) that have been sitting with dealers a long long time. Sometimes they are in a position to just shoot for the moon.

Dealers and auctions can both be good or bad places to buy (or sell)

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12 hours ago, lsf said:

 There are some real deals to be had in the lower priced instruments and bows if you know what you're doing.  Pricey could be dicey.

Not really. Anything interesting is also interesting to dozens of other dealers. I remember Jacob writing, something along the lines of, most people claiming to find gems are overdrafting their bank accounts.

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I try to keep it in mind that if I should happen to make the winning bid everyone else in the "room" will be thinking "I wouldn't have paid that much"

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The flip side if this is that you are asking a forum full of makers and dealers, so these replies require salt too. 

Undoubtedly there are good deals at both retail and auction, but of course you can also pay too much at either. And the dealers with great reputations are going to tend to charge more, right? 

I bought a beat up instrument at an auction recently, and it sounded the best of the ones that were playable. Even with repairs, it will play better than anything around its cost, especially from a dealer. 

So for a player, there are always deals. It is collectors that have a harder time finding a "deal." 

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In general this message board has too much of a preoccupation with getting the best "deal" as well as the foolishness of "overpaying". Figure out what you like, spend your moldy money, and get on with it. Sometimes what you like pops up at auction, sometimes its a dealers shop.

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20 hours ago, Porteroso said:

The flip side if this is that you are asking a forum full of makers and dealers, so these replies require salt too. 

 

What I suggested you take with a pinch of salt was the assertion that a Vuillaume might be $250k at auction and the same Vuillaume $700k at retail.

This is doublespeak on many levels, and if a representative of an auction house said that to me I would laugh in their face (well, probably I wouldn't because I'm polite, but I would laugh inwardly).

Of course it's possible to get bargains at auction - you just need to be better informed than everyone else about a particular instrument.

Or to paraphrase Clint Eastwood "Do ya feel lucky punk?"

 

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What's difficult about this discussion is the definition of "bargain". For a musician, there are occasions when a good and well certified violin will sell for less than at retail. If a buyer is confident enough of the playing qualities on the basis of a very short exposure to it, and with the lack of a fair return or upgrade policy or aftersales service generally, then much of the time the price will be less than retail. Though increasingly we are seeing the really fine player's violins by well known makers being fought over to the point where they exceed a retail price. 

Amateur dealers or serial fiddle hounds tend to think they have got a bargain based on a false notion of the resale value. Whether it's through a miscalculation of the restoration costs, or the difficulty of getting a certificate, or optimism/ignorance about the market (difficulty of selling big violins, soft bows, poor examples etc), all I can say is that I am constantly being shown "bargains" that people have bought at auction which I would simply not try to sell at all.

For a professional dealer the agenda is very different - we have to make good commercial decisions. Many of the people we bid against can afford to make one mistake, maybe even two or three - they may even enjoy it!

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I totally agree, anyone looking for instruments that will appreciate, or instruments they can resell for profit, will have a different goal than someone who wants an instrument that makes life easier than their current one. 

My point was that this forum has a lot of people who don't care as much about how the instrument sounds as other things, but for most people buying to play, that is by far the priority. 

Just different priorities, is all. I agree that any auctioneer will cherry pick examples of great deals all day long. And in their defense, their business model is totally valid, and it's ok for them to make money too. Often their commission is much lower than what you find at the big shops. 

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3 minutes ago, Porteroso said:

I totally agree, anyone looking for instruments that will appreciate, or instruments they can resell for profit, will have a different goal than someone who wants an instrument that makes life easier than their current one. 

My point was that this forum has a lot of people who don't care as much about how the instrument sounds as other things, but for most people buying to play, that is by far the priority. 

Just different priorities, is all. I agree that any auctioneer will cherry pick examples of great deals all day long. And in their defense, their business model is totally valid, and it's ok for them to make money too. Often their commission is much lower than what you find at the big shops. 

Agree with most of that ....

However, on the subject of commission, we take around 15% on higher value items. Although auctioneers may adapt their commission in certain circumstances, the standard in the UK is 35%, 15% from the seller and 20% from the buyer.

 

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1 hour ago, martin swan said:

Although auctioneers may adapt their commission in certain circumstances, the standard in the UK is 35%, 15% from the seller and 20% from the buyer.

I don't buy and sell instruments at auction but I know with fine wine it's not unusual to drop the seller's commission for a consignment they want to include in a sale, e.g. older blue-chip grand crus at a Burgundy-themed sale.

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2 hours ago, martin swan said:

Many of the people we bid against can afford to make one mistake, maybe even two or three - they may even enjoy it!

To them it might not be a "mistake". Maybe they finally found what they are looking for and were just willing to belly up. And it could be for a variety of reasons.

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I suppose I would define "mistake" as purchasing something which doesn't cover its costs (hidden or otherwise) at resale.

For an amateur or part-time dealer, their costs might be significantly lower, for example not paying VAT or corporation tax on the proceeds of a sale, or all the other costs of running a full-blown business.

And if there is no intention to re-sell, then there is no test of actual value.

This may be why dealers are a bit more circumspect about the joys of auction than non-professional buyers.

Ultimately an auction is a venue where the buyer sets the purchase price. Because of this, there is an assumption that the price is necessarily lower than it otherwise would be. Yet it's just as easy to argue that in most cases it's necessarily higher than it otherwise would be.

My own view is that violin auctions are still more suited to trade buyers who have specialist knowledge, and who can spread their risk over a number of purchases. 

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3 hours ago, lsf said:

When I said there are "deals" to be had, I meant what Portereo was referring to as "players".   Reasonably priced instruments that don't attract the attention of dealers because they have little potential to make a profit on, but are good sounding, serviceable instruments that  will shine with a new set up and maybe a bit of work.  Buying and selling to make a profit is a completely different situation, I would guess very difficult.

 

Yes, look for good German instruments, and some older Americans.

 

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