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Underbidder Obligation?

brianc1959brianc1959 Posts: 327 ✭✭✭✭✭

So far I've won two lots and been the underbidder on 10 others in the FUN HA auctions. Basically, I've got a rough overall budget in mind, and if I wind up as an underbidder I just move on the the next item of interest. "More fish in the sea" and all that. But a dark thought crossed my mind last night: what if the winner of one of the lots in which I was the underbidder bailed - would my underbid suddenly become "live" again, like some zombie rising from the grave? I'm a little concerned because I've been operating under the assumption that I have no obligation once I lose an auction.

Comments

  • lcoopielcoopie Posts: 8,668 ✭✭✭✭✭

    Not as far as I know.

    LCoopie = Les
  • coinkatcoinkat Posts: 22,681 ✭✭✭✭✭

    Suddenly... as in when? During the auction within seconds or minutes? Before or after the hammer falls on the following lot? If before and if this happens live, seems you may have bought the lot if there were no other bidders that topped your bid.

    However, I think you are correct... in that if the hammer fell and you landed on the short side, I think any obligation ends at the time the auction for that specific lot ended if there was a continuation of the auction. If someone fails to pay later, I do not see that as your problem.

    Experience the World through Numismatics...it's more than you can imagine.

  • FloridafacelifterFloridafacelifter Posts: 1,138 ✭✭✭✭✭

    @TomB said:
    If the lot closes and you are the underbidder then you are under no obligation to purchase the lot.

    Correct- however if the winning bidder bails on the purchase after the close of the auction, the auction house may contact you and offer you the lot at your highest bid (the underbid), but you are under no obligation to purchase.

  • seatedlib3991seatedlib3991 Posts: 409 ✭✭✭✭

    I know that is how it worked at Heritage in the late 90's. I was underbidder on an Indian cent and was told that the original bidder could not make an acceptable payment but was offered an no obligation chance to buy at my bid. And I did. James

  • TimNHTimNH Posts: 109 ✭✭✭

    One of the big-3 auctions (don't recall which) hits you with a warning that if the top bidder falls through, your bid might still be active. Never happened to me, but made me a little nervous, like what if I go buy another one and then as you say the old zombie rises from the grave?

  • DropdaflagDropdaflag Posts: 757 ✭✭✭✭

    @TimNH said:
    One of the big-3 auctions (don't recall which) hits you with a warning that if the top bidder falls through, your bid might still be active. Never happened to me, but made me a little nervous, like what if I go buy another one and then as you say the old zombie rises from the grave?

    Wow! That sounds like it could scare people off of making more bids. Counter productive to bottom line.

  • alaura22alaura22 Posts: 2,485 ✭✭✭✭✭

    Well then, I guess I'm hoping that the winning bidder bails and I get a email :):)

  • brianc1959brianc1959 Posts: 327 ✭✭✭✭✭

    Thanks all for the comments - I'm going to rest easier now!

  • fluffy155fluffy155 Posts: 221 ✭✭✭✭

    I got a second chance on this one after the high bidder bailed, but was not under any obligation. The only thing that annoyed me is that he and I had gone back and forth during the live event, but I was only able to buy it at my highest bid. I understand why they did that, but it still left a bit of a sour taste as without his bids I would have bought it at a much lower price.

  • bsshog40bsshog40 Posts: 3,739 ✭✭✭✭✭

    I've had the same thing happen to me on ebay also. Winning bidder did not pay and was offered item at my bid from seller. No obligation to take it, but I usually do.

  • CaptHenwayCaptHenway Posts: 31,442 ✭✭✭✭✭

    What if Collector A and Collector B make the last six bids, with Collector B making the last bid but then failing to pay? Should any of B’s last three bids count? Should A be offered the chance to buy the lot at his last bid before B stepped in?

    Numismatist. 50 year member ANA. Winner of four ANA Heath Literary Awards; three Wayte and Olga Raymond Literary Awards; Numismatist of the Year Award 2009, and Lifetime Achievement Award 2020. Winner numerous NLG Literary Awards.
  • MFeldMFeld Posts: 11,750 ✭✭✭✭✭
    edited January 13, 2024 2:07PM

    @CaptHenway said:
    What if Collector A and Collector B make the last six bids, with Collector B making the last bid but then failing to pay? Should any of B’s last three bids count? Should A be offered the chance to buy the lot at his last bid before B stepped in?

    If I understood your scenario accurately, I’m confident that the consignor would much prefer to have the lot returned or consigned to another sale. After all, that could result in a price that was a small percentage of the closing price realized. And the auction house needs to be fair to the consignor, as well.

    Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.

  • NJCoinNJCoin Posts: 1,344 ✭✭✭✭✭

    @MFeld said:

    @CaptHenway said:
    What if Collector A and Collector B make the last six bids, with Collector B making the last bid but then failing to pay? Should any of B’s last three bids count? Should A be offered the chance to buy the lot at his last bid before B stepped in?

    If I understood your scenario accurately, I’m confident that the consignor would much prefer to have the lot returned or consigned to another sale. After all, that could result in a price that was a small percentage of the closing price realized. And the auction house needs to be fair to the consignor, as well.

    Correct. And fair is offering it at the last price before the reneging bidder got involved. Not necessarily one increment below the reneged final bid!

    If that's not good enough for the consignor, then, sure, let them take their chances in a future auction. As an under bidder, in the absence of other bidders, I sure would not appreciate finding myself bid up to the point where the winner reneged, and then be offered the coin several increments above where I would have won had the reneger not been involved at all. I'd take a pass, given that I already lost the auction, and see what happens in a future auction.

  • MFeldMFeld Posts: 11,750 ✭✭✭✭✭

    @NJCoin said:

    @MFeld said:

    @CaptHenway said:
    What if Collector A and Collector B make the last six bids, with Collector B making the last bid but then failing to pay? Should any of B’s last three bids count? Should A be offered the chance to buy the lot at his last bid before B stepped in?

    If I understood your scenario accurately, I’m confident that the consignor would much prefer to have the lot returned or consigned to another sale. After all, that could result in a price that was a small percentage of the closing price realized. And the auction house needs to be fair to the consignor, as well.

    Correct. And fair is offering it at the last price before the reneging bidder got involved. Not necessarily one increment below the reneged final bid!

    If that's not good enough for the consignor, then, sure, let them take their chances in a future auction. As an under bidder, in the absence of other bidders, I sure would not appreciate finding myself bid up to the point where the winner reneged, and then be offered the coin several increments above where I would have won had the reneger not been involved at all. I'd take a pass, given that I already lost the auction, and see what happens in a future auction.

    I believe that most underbidders would prefer being offered the coin at an increment below the winning bid, rather than not at all. On a practical basis, those are often the only two options. And there’s certainly understandable if the underbidder declines.

    Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.

  • NJCoinNJCoin Posts: 1,344 ✭✭✭✭✭

    @MFeld said:

    @NJCoin said:

    @MFeld said:

    @CaptHenway said:
    What if Collector A and Collector B make the last six bids, with Collector B making the last bid but then failing to pay? Should any of B’s last three bids count? Should A be offered the chance to buy the lot at his last bid before B stepped in?

    If I understood your scenario accurately, I’m confident that the consignor would much prefer to have the lot returned or consigned to another sale. After all, that could result in a price that was a small percentage of the closing price realized. And the auction house needs to be fair to the consignor, as well.

    Correct. And fair is offering it at the last price before the reneging bidder got involved. Not necessarily one increment below the reneged final bid!

    If that's not good enough for the consignor, then, sure, let them take their chances in a future auction. As an under bidder, in the absence of other bidders, I sure would not appreciate finding myself bid up to the point where the winner reneged, and then be offered the coin several increments above where I would have won had the reneger not been involved at all. I'd take a pass, given that I already lost the auction, and see what happens in a future auction.

    I believe that most underbidders would prefer being offered the coin at an increment below the winning bid, rather than not at all. On a practical basis, those are often the only two options. And there’s certainly understandable if the underbidder declines.

    Thanks! As to what under bidders would prefer, that would probably depend on the under bidder, and on how unique the coin is. All I know is that in live auctions in which I have been involved, not involving coins, the item is either immediately rebid, if the winner reneges immediately, or goes back to the house.

    No one allows someone to jack up the bidding to see how high someone will go, and then stick the under bidder at one increment below the reneged winning bid, assuming there are only two bidders at the end. Totally different story if someone not reneging is involved, because in that case the bid below the under bidder is legitimate.

    In a Heritage coin auction, I cannot imagine an under bidder being involved in spirited bidding with a single bidder who later reneges, and then happily buying the coin one increment below the winning bid, when the next highest bid not submitted by the reneger might be 10 or more increments below that.

    It's the flip side of the concern you expressed earlier about that price being a small fraction of the reneged bid. If the consignor believes other people would have gotten involved in the absence of the reneger, they should absolutely relist in a future auction. But, as a prospective under bidder, I would never give the house, or the consignor, the benefit of that doubt and just pay an amount several increments above where anyone other than the reneger bid in the actual auction.

  • MFeldMFeld Posts: 11,750 ✭✭✭✭✭

    @NJCoin said:

    @MFeld said:

    @NJCoin said:

    @MFeld said:

    @CaptHenway said:
    What if Collector A and Collector B make the last six bids, with Collector B making the last bid but then failing to pay? Should any of B’s last three bids count? Should A be offered the chance to buy the lot at his last bid before B stepped in?

    If I understood your scenario accurately, I’m confident that the consignor would much prefer to have the lot returned or consigned to another sale. After all, that could result in a price that was a small percentage of the closing price realized. And the auction house needs to be fair to the consignor, as well.

    Correct. And fair is offering it at the last price before the reneging bidder got involved. Not necessarily one increment below the reneged final bid!

    If that's not good enough for the consignor, then, sure, let them take their chances in a future auction. As an under bidder, in the absence of other bidders, I sure would not appreciate finding myself bid up to the point where the winner reneged, and then be offered the coin several increments above where I would have won had the reneger not been involved at all. I'd take a pass, given that I already lost the auction, and see what happens in a future auction.

    I believe that most underbidders would prefer being offered the coin at an increment below the winning bid, rather than not at all. On a practical basis, those are often the only two options. And there’s certainly understandable if the underbidder declines.

    Thanks! As to what under bidders would prefer, that would probably depend on the under bidder, and on how unique the coin is. All I know is that in live auctions in which I have been involved, not involving coins, the item is either immediately rebid, if the winner reneges immediately, or goes back to the house.

    No one allows someone to jack up the bidding to see how high someone will go, and then stick the under bidder at one increment below the reneged winning bid, assuming there are only two bidders at the end. Totally different story if someone not reneging is involved, because in that case the bid below the under bidder is legitimate.

    In a Heritage coin auction, I cannot imagine an under bidder being involved in spirited bidding with a single bidder who later reneges, and then happily buying the coin one increment below the winning bid, when the next highest bid not submitted by the reneger might be 10 or more increments below that.

    It's the flip side of the concern you expressed earlier about that price being a small fraction of the reneged bid. If the consignor believes other people would have gotten involved in the absence of the reneger, they should absolutely relist in a future auction. But, as a prospective under bidder, I would never give the house, or the consignor, the benefit of that doubt and just pay an amount several increments above where anyone other than the reneger bid in the actual auction.

    Just to be sure there’s no misunderstanding, my comments weren’t addressing the scenario where the winning bidder reneges immediately during a live auction. In that event, I’ve seen the lot reopened immediately. And if the top two bidders are bidding on-line, they might have no idea who’s/how many other bidders are bidding against them.

    Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.

  • NJCoinNJCoin Posts: 1,344 ✭✭✭✭✭
    edited January 13, 2024 5:29PM

    @MFeld said:

    @NJCoin said:

    @MFeld said:

    @NJCoin said:

    @MFeld said:

    @CaptHenway said:
    What if Collector A and Collector B make the last six bids, with Collector B making the last bid but then failing to pay? Should any of B’s last three bids count? Should A be offered the chance to buy the lot at his last bid before B stepped in?

    If I understood your scenario accurately, I’m confident that the consignor would much prefer to have the lot returned or consigned to another sale. After all, that could result in a price that was a small percentage of the closing price realized. And the auction house needs to be fair to the consignor, as well.

    Correct. And fair is offering it at the last price before the reneging bidder got involved. Not necessarily one increment below the reneged final bid!

    If that's not good enough for the consignor, then, sure, let them take their chances in a future auction. As an under bidder, in the absence of other bidders, I sure would not appreciate finding myself bid up to the point where the winner reneged, and then be offered the coin several increments above where I would have won had the reneger not been involved at all. I'd take a pass, given that I already lost the auction, and see what happens in a future auction.

    I believe that most underbidders would prefer being offered the coin at an increment below the winning bid, rather than not at all. On a practical basis, those are often the only two options. And there’s certainly understandable if the underbidder declines.

    Thanks! As to what under bidders would prefer, that would probably depend on the under bidder, and on how unique the coin is. All I know is that in live auctions in which I have been involved, not involving coins, the item is either immediately rebid, if the winner reneges immediately, or goes back to the house.

    No one allows someone to jack up the bidding to see how high someone will go, and then stick the under bidder at one increment below the reneged winning bid, assuming there are only two bidders at the end. Totally different story if someone not reneging is involved, because in that case the bid below the under bidder is legitimate.

    In a Heritage coin auction, I cannot imagine an under bidder being involved in spirited bidding with a single bidder who later reneges, and then happily buying the coin one increment below the winning bid, when the next highest bid not submitted by the reneger might be 10 or more increments below that.

    It's the flip side of the concern you expressed earlier about that price being a small fraction of the reneged bid. If the consignor believes other people would have gotten involved in the absence of the reneger, they should absolutely relist in a future auction. But, as a prospective under bidder, I would never give the house, or the consignor, the benefit of that doubt and just pay an amount several increments above where anyone other than the reneger bid in the actual auction.

    Just to be sure there’s no misunderstanding, my comments weren’t addressing the scenario where the winning bidder reneges immediately during a live auction. In that event, I’ve seen the lot reopened immediately. And if the top two bidders are bidding on-line, they might have no idea who’s/how many other bidders are bidding against them.

    Oh, I totally understand. No misunderstanding, and I HAVE participated in Heritage auctions, so I understand payment is not immediately after a lot ends, so Heritage would not know for several days that someone is failing to honor their bid.

    No, I wouldn't know how many people I am bidding against in a live online auction. But, it's a question I would ask when offered an item as an under bidder, and I would expect an honest answer from the house.

    That said, what I am saying still applies. If it's just me and one other person, I'm not paying one increment below the winning reneged bid, since I have no way to know where the bidding would have ended absent the reneger.

    That risk is the consignor's, and I would never assume it by paying up. If the consignor does not want to accept the last bid before the reneger got involved, they can relist.

    At the end of the day, unless it's a very unique item, it's the consignor that needs to sell. I already lost the auction, and have no imperative to pay up. PLENTY of auction items are under water by a lot immediately after an auction, when the excitement fades and there is no secondary market one bid increment below where the winner bid.

  • retirednowretirednow Posts: 443 ✭✭✭✭✭
    edited January 14, 2024 2:59PM

    @MFeld said:

    @NJCoin said:

    @MFeld said:

    @NJCoin said:

    @MFeld said:

    @CaptHenway said:
    What if Collector A and Collector B make the last six bids, with Collector B making the last bid but then failing to pay? Should any of B’s last three bids count? Should A be offered the chance to buy the lot at his last bid before B stepped in?

    Interesting subject and timing for me ... for the 1st time in 20 years I was notified by Heritage of a winning bidder on a lot that where I was the under bidder, did not conclude the contract with Heritage and the turned around and offered it to me at my last Bid, The auction was back in Nov.... I did not accept the offer for various reasons but I did wonder what happens next. I do not recall if I was actively bidding on the lot or just put in a proxy bid.

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