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Concept of pre auction estimates
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October 30, 2021 - 1:16 am
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When contemplating an antique Winchester rifle to purchase at auction, how much attention do you pay to pre auction estimates?  Do you decide what a firearm is worth independent of that and just entirely disregard it, do you feel like you got a bargain if you purchase something less than the low end estimate, and/or do you hesitate if the bids start to escalate, sometimes rapidly, well beyond the high end estimate?

Also, does one know if it’s even commonly understood that a pre auction estimate should include the buyer’s premium, or if the ranges suggested is before any buyer’s premium is figured in?

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October 30, 2021 - 1:59 am
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Estimates are almost always low, so as to sucker the unwary into thinking they have a chance to buy at a somewhat reasonable price.  Once they’re committed to bidding, the hope of the auctioneer is that, carried away by bidding frenzy, they’ll spend way beyond their original limit; may not work with all bidders, but it certainly works with many.

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October 30, 2021 - 2:14 am
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Estimate is made by someone who has closely watched thousands of guns sell, more than a few similar to the one you’re interested in. As Clarence pointed out, the person making the estimate has a vested interest in attracting bidders. If my rough guess differs from the estimate I try to determine why. It’s an academic exercise for me as I seldom sell at the large auctions and so far haven’t bought. Auction reps seeking my consignments generally offer a conservative estimate but we all know things get a little out of hand sometimes when two or more want something and are willing to pay more than it is worth to anyone else. 

A good lawyer will tell you never to bet on a jury, a good auctioneer will never really know until the hammer falls and will tell you the same. Some crazy stuff going on at auctions these days. Money to be made, money to be spent. 

 

Mike

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October 30, 2021 - 12:38 pm
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TXGunNut said Auction reps seeking my consignments generally offer a conservative estimate but we all know things get a little out of hand sometimes when two or more want something and are willing to pay more than it is worth to anyone else. 
 

A hammer price that exceeds the estimate by a small percentage isn’t what I was talking about–that could be random error .  It’s the ones that sell for DOUBLE the estimate or more (which I’ve seen happen countless times in major online auctions) that aren’t “accidental” errors of judgement, but deliberate underestimates to attract more bidders. 

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October 30, 2021 - 12:44 pm
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 My experience has mainly been the large auction houses. A couple years ago when gun prices where soft I saw some select gun estimates at RIA artificially low in an attempt to attract attendance, it created interest. They never sold cheap, I soon learned if I was interested so were many other collectors. You can call this smart marketing or I was a fool. RIA is a well oiled selling machine, they are good at turning guns into money. Fast forward to today and they have a backlog of guns and buyers standing in line. They don’t have to play games with auction estimates. If I’m not willing to pay retail/auction price for a gun, I don’t participate.

 The gun market today is strong! If I want something bad enough I will go to the RIA and pay more for the gun than anyone else. You are bidding at one of the best advertised gun auction in the world with a marketing plan that works for them. T/R

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October 30, 2021 - 1:46 pm
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Folks,  TR obviously has this thought out and well represents what is going on.  Estimates often are relatively close, but there are always the outlying data points.  There are times I marvel when the bidding price ends up way beyond the top end estimates.  But look at the item, which is often a one of a kind or one of very few (recent example is the 1 of 100 Model 1876).  Who would feel they could accurately determine its likely sale point as so few having ever sold!  I never bothered figuring MY estimate as I knew I was never going to be in the bidding!  As to ones I am interested in–I calculate my price and quit there if it is reached (should I say WHEN?).  More times than not I am low.  How do I reach my price?  It often depends on how badly I need it for a niche in my collection (what does it add for ME at this point in time), then how much disposable cash do I have at this point in time, and then I consider recent past sales,, when possible, and at last compare with the auction company estimates.  Sometimes I come out higher than the top estimate.  Like TR said, usually if I am after the item, so are a bunch of others!  I have no problems dealing with RIA for those items they offer and I want.  I know the rules and if I am willing to pay the price often get something not available otherwise.  I don’t go there to buy firearms to flip–they are ones I wish to have for my own satisfaction.  Tim

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October 30, 2021 - 3:49 pm
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It often amuses me that the winning bidder – the person who is willing to pay more than anyone else – is often a dealer/speculator who is buying it for resale – and usually has a hefty mark-up in mind!  

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October 30, 2021 - 4:47 pm
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steve004 said
It often amuses me that the winning bidder – the person who is willing to pay more than anyone else – is often a dealer/speculator who is buying it for resale – and usually has a hefty mark-up in mind!    

What do you mean “usually”?  It pays to know your suckers; just ask L.M.

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October 30, 2021 - 4:54 pm
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clarence said

What do you mean “usually”?  It pays to know your suckers; just ask L.M.  

Clarence – 

I concede you are correct – these guys always have a big mark-up in mind.  

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October 30, 2021 - 8:14 pm
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I will confess I always pay a lot of attention to pre-auction estimates.  That doesn’t mean I ascribe any particular meaning to them.  I agree that they set them low to entice bidders into believing they might be able to pick up something on the low side.  

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October 30, 2021 - 9:17 pm
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TR said
If I’m not willing to pay retail/auction price for a gun, I don’t participate.

This is a key point.  If you don’t know the retail price already you shouldn’t participate or you know when to stop bidding and do so.

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