The hammer price is the final bid accepted by the auctioneer: the moment the gavel falls and the lot is declared sold. It’s the base sale price of the item. But it’s not the full amount the buyer ends up paying.
Buyer’s Fees
On top of the hammer price, auction houses charge buyer's fees (also known as the buyer’s premium): a fee added to the invoice, usually calculated as a percentage of the hammer. This is paid by the buyer and typically ranges from 20% to 30%, depending on the auction house and the sale category.
Tiered Premiums
Most major auction houses use a tiered structure. That means the percentage premium decreases as the price of the lot increases. For example, a house might charge 25% on the first £100,000, then 20% on the next £400,000, and 15% on anything above that. It’s a sliding scale, not a flat rate, so the higher the hammer price, the lower the marginal premium on each bracket. Understanding how these tiers work is especially useful when planning to bid on higher-value items.
Price Reporting
Estimates listed in the catalogue — both low and high — do not include the buyer’s premium. But the final prices announced after the sale often do. This can make results appear stronger than they were on the hammer alone. A work that hammers below its low estimate might seem to have met expectations once the premium is added. It’s a subtle shift, but it shapes how auction performance is presented and understood.
See also: Auctions 101: Reserves vs. Estimates
For buyers, it’s essential to factor in the premium when setting a bidding limit. For sellers, it’s worth knowing that the headline figure includes money that doesn’t go to them. Additionally, buyers should consider taxes like VAT or sales tax, which can add to the final cost – something we cover in detail here.
