There are several key terms related to an auction item's value: the reserve price, the estimate, and the opening bid. While they all relate to price, they serve distinct purposes. Understanding these differences is crucial for effective bidding.
What is an Auction Reserve?
An auction reserve is the lowest price a seller is willing to accept for a lot. If bidding doesn’t meet that price, the item won’t sell. Reserves are usually kept confidential, and while bidders may try to guess the threshold, they won’t know it unless the auction house chooses to reveal it.
Most lots at auction carry a reserve, even if it's never explicitly mentioned. Lots offered without a reserve are often marked with a symbol, such as a small circle (•), to indicate they're selling with no minimum price. These "no-reserve" lots can attract significant attention, especially from buyers willing to take a chance on a bargain. This often leads to early and competitive bidding, sometimes driving the price beyond expectations. For sellers, going no-reserve can be an effective strategy when the main goal is a guaranteed sale, rather than achieving a specific high price.
What is an Auction Estimate?
Unlike the confidential reserve, the estimate — also known as the "guide price" or "pre-sale estimate" — is a publicly stated price range indicating where the final selling price might fall. These estimates appear in the auction catalogue alongside each lot description.
Determined by auction house specialists, estimates are based on factors such as condition, rarity, provenance, and recent comparable sales. They provide a general sense of an item's value and help inform bidding strategies.
While useful, estimates are not definitive; final hammer prices can fall below or exceed the range depending on bidding dynamics.
What About the Opening Bid?
The opening bid is the starting price on auction day, often set deliberately below the confidential reserve to spark early interest and build momentum. Setting it too high can deter potential buyers before bidding gains traction.
Although often confused with the reserve, the two are distinct. A lot can open below its reserve, and if bidding stalls before reaching it, the auctioneer may pass the lot or “buy it in” on the seller’s behalf.
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