Know where the value ends before the spending starts!
Some successful auction bidders think that the auction house’s commission and fees can be added to the value of the gun. While these certainly add to the overall cost of the purchase, they have nothing to do with the value of the gun.
I got into one of my most recent heated discussions (that’s been happening to me a lot lately) after a friend of mine innocently mentioned that he had just purchased a Model 1866 Winchester rifle at a major auction for almost $12,000. Asking him if the price included the auction’s “juice” (i.e., commission – typically 15%-18% for the auctioneering services), his response was, “Of course – you have to add that to the value of the gun since the auction company includes it in the prices realized.” I sensed defective thinking immediately, and proceeded to explain to him why it was wrong. While the auction’s commission fee and shipping/handling/insurance charges can be added to the final hammer price, which adds to the overall purchase price, it DOES NOT add to the gun’s value.
I then asked him, “Do you consider the sales tax paid when purchasing a new car to add to its value?”
“It’s the same thing with gun auctions,” was my reply, “and that’s why the gavel price of around $10,000 represents an auction price, which may actually be close to its actual value.” The additional $2,000 represented the auction’s consumer services, fees, and S/H, and has nothing to do with the overall value of the gun.
There were 3-4 seconds of awkward silence, followed by a begrudging, “Never looked at it that way before, but I agree with what you are saying. Good point.”
Know where the upper end of this gun’s value ends before raising your paddle.
Moral to the story? Never confuse prices with values, and also remember that an auction’s hammer price may or may not reflect the gun’s current value, without the additional fees and services.
Images courtesy of Rock Island Auction.