Understanding Buyer's Premium & Proxy Bidding at Online Auctions
How auction fee structures work, why soft-close formats prevent sniping, and how it maximizes seller payouts.
By Tracie Davis, Owner • SunnyCal Estate Sales & Auctions
What is a Buyer's Premium?
At an online auction, the final bid is called the "hammer price." The Buyer's Premium (typically 15%) is an additional charge paid by the purchaser on top of the winning bid. This standard mechanism allows auction companies to invest heavily in digital marketing, professional photography, credit card processing, and cataloging without charging exorbitant upfront fees to the seller family.
How Automated Proxy Bidding Works
Rather than sitting at a computer all day, a buyer enters the maximum amount they are willing to pay for an item. The software automatically bids on their behalf in standard increments only as needed to maintain the winning position. This means buyers can enter their true ceiling early in the week without driving up the price prematurely.
The Power of the "Soft-Close" (No Sniping)
On platforms like eBay, "snipers" wait until the final two seconds to enter a bid, cutting out other buyers. SunnyCal auctions use a soft-close dynamic countdown: if a bid is entered in the final minutes of a lot, the timer automatically extends by 2 to 3 minutes. This ensures every interested buyer has an opportunity to counter-bid, extracting the maximum dollar value for the estate.
Key Takeaways for Executors & Families:
- Buyer's premium is paid by purchasers, subsidizing marketing costs.
- Proxy bidding lets busy collectors participate without missing closing night.
- Soft-close timer extensions protect sellers from last-second bid sniping.
Guides for Families in Transition
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