Under the hammer

The world of auctions and auction houses is changing. In parallel with the legal profession, the biggest firms are truly global, there are quality high-end national brands, there are the generalists who take on almost anything, and digital technology has supported the emergence of niche businesses that thrive in their own specialisms.

While disposals of executry assets are perhaps the most common situation where solicitors will have dealings with auctioneers, sales of private collections or heirlooms, house clearances, corporate disposals of assets and sales following insolvency all have outlets, along with insurance related and other valuation work, safe storage and transport.

“In broad terms there is nearly always a market for a property,” observes Shaun Vigers of SVA Property Auctions, in words that could be applied beyond his sector of land sales. “The key to a successful sale is getting the pricing right, but also determining the size of the market for any particular property and successfully targeting that market with the auction advertising.”

At the upper end of the market, Lyon & Turnbull managing director Gavin Strang reports that: “Whilst the markets for many traditional art and antiques categories have been quite ‘soft’ in recent years, nonetheless the best and rare examples in every category are doing extremely well and top prices are constantly being achieved.” Charles Graham-Campbell of Bonhams agrees that the demand is there: “The market in general is strong for the rarest and ‘best-of-the-best’, with prices remaining high in all categories.”

Put it on the web

International exposure is important to achieving the best price for a lot, and this is where the internet can help level the playing field, affirms Martin Cornish of Edinburgh’s Ramsay Cornish, which includes Twitter and Facebook in its marketing methods: “Historically before the advent of the internet and social media, it was common to send high value items south or to sell with the big salerooms. This is no longer the case as international exposure is now available to provincial salerooms, with benefits to the client of reduced transport and sales costs.”

Niche business Scotch Whisky Auctions decided early on to concentrate on selling online, and in less than five years has become a global leader, sending old and rare whiskies all over the world – even (whisper it) some not of Scottish origin, such as Japanese whiskies and older bourbons. “So frenzied has the market become for Japanese whiskies such as Karuizawa,” the firm’s Bill Mackintosh comments, “that whiskies which have been sent from Taiwan to auction very often are bought by Taiwanese bidders, and so are shipped right back where they came from!”

Wilsons Auctions, whose website invites online bidding, also makes use of its presence across the British Isles to realise “contentious” assets outside of their jurisdiction of origin – no doubt a reference to its work on behalf of law enforcement agencies such as Police Scotland.

Lyon & Turnbull, which operates in Glasgow and London as well as from its Edinburgh headquarters, claims an international reach through a marketing alliance with Freeman’s of Philadelphia, the USA’s oldest auctioneer. Online bidding (for an additional fee) is available to those who create an account via its website.

Bonhams knows how to make the most of its seven locations globally. “We believe that placing items to be sold in the right auction in the right location is of utmost importance,” Graham-Campbell states. An American work from a Scottish executry made $110,500 in Bonhams’ New York saleroom; and a painting by Scottish Colourist John Duncan Fergusson was sent from Paris to Edinburgh where it sold for £134,500. All auctions are shown on its website with a live audio and video feed, and online bidding is available free of charge.

Who pays what

Speaking of charges, what can clients expect to pay? Naturally there is some variation with the type of item on offer, and various particular charges apply so that readers are advised to check the specific terms and conditions relevant to their transaction.

Regarding headline rates, at Scotch Whisky Auctions, buyers and sellers both pay 10% of the hammer price, plus VAT on that commission element (not on the price itself). Sellers pay £3 per lot, and an additional £4 if a reserve price is desired, all plus VAT. At SVA Property Auctions, vendors pay £500 plus VAT to market a standard lot, including brochure and website, and then a sale fee of 1.5% of the sale price (plus VAT), subject to a minimum fee for smaller-sized lots.

Commissions vary at the generalist houses. Lyon & Turnbull charges the seller 15% (minimum £30) and the buyer 25% (20% above £50,000); Bonhams has similar buyers’ rates but prospective sellers have to consult the relevant department regarding sale commission. Ramsay Cornish charges 17% across the board, on the basis that higher charges to buyers make them more likely to bid less.

SVA takes that further, by not charging any buyer’s premium, on the basis that this maximises value for the seller, as buyers will bid to their maximum figure without worrying about additional charges.

The company highlights for solicitors’ attention one particular aspect of sales of land by auction: “It is essential that potential bidders are able to complete their due diligence timeously during the pre-auction marketing period,” Shaun Vigers points out. “Nothing frustrates a bidder more than the seller’s legal pack not being ready and available for inspection. Secondly, and with the recent introduction of the Land Registration (Scotland) Act, the availability of an acceptable sale plan is essential. This is especially important when offering non-land-registered titles or if you are selling part of a large title.”

To conclude on a more personal note, imagine the enthusiasm for their work of Scotch Whisky Auctions’ Mackenzie and his co-founder Tam Gardiner, who says: “For anyone with a love of whisky, as Bill and I have, this is the dream job. We get to see and talk about some of the best whiskies in the world with some of the keenest collectors.”

Profile: Bonhams

Profile: Scotch Whisky Auctions

Profile: Ramsay Cornish

Profile: Lyon & Turnbull

Profile: SVA Property Auctions

Profile: Wilsons Auctions