How do Auction houses calculate estimated values on works?


#1

How do Auction houses calculate estimated values on works?
Any details?

Is there a industry standard or is each house different?

Thanks


#2

I’m not sure if there is an industry standard, but I guess they take all the information available from other sales and auctions and base their prices on that. A good estimate is also low enough to make people bid, but high enough to seem right.
A common mistake by bad auction houses are too high estimates that scare off potential buyers. Also, results that beats the estimate is always preferable to sales below.


#3

I believe each house is different. I know a small auction house that calculate estimated value on a case to case basis, mainly depending on historical prices.


#4

Low estimates are prevalent to lure in buyers, no? Would be interesting to see if auction results are consistently closer to the high estimate… Might be a bit tricky to make a statistic of, as you also would have to consider all the lots that didnt sell. I know that real estate agents in my area consistently price 10% below marketprice.


#5

Of course they want to lure in the buyers. if you boil it down that’s the job of the estimate IMHO.