Phillips announced today that they will launch a new tiered buyer’s premium structure by which advance bids (placed over 48 hours before the auction) will have lower fees than those bids placed during the auction or closer to it. Buyer’s premium for non-advance bids in the lowest value tier will be 29%, the highest ever at any of the major auction houses.

The application of preferential fees for advance bidding has a commonality with the principle of the third-party guarantee, by which the guarantor receives a financing fee in exchange for commitment, though financing fees paid to third-party guarantors are negotiable, whereas Phillips’s new tiered BP structure will proceed according to fixed rules.

Auction houses do not publicize whether a guaranteed lot sells to the guarantor or to another party, but since the financing fee paid to the guarantor/successful bidder is reflected in the total amount of buyer’s premium paid (both on the auction house website and on third-party price databases), one can review the hammer price in tandem with the premium price and interpret accordingly.

Similarly, one should expect that Phillips will not publicize whether a lot sells to an advance bidder or to a non-advance bidder. However, when one compares the hammer price with the premium price, one will be able to deduce, for example, by examining whether the latter is 25% or 29% above the former.

Such variances in buyer’s premium underscore the importance for the appraiser of knowing both the hammer price and the premium price. For example, when assessing Marketable Cash Value (MCV), one cannot simply back out a rounded BP from a premium price, because the BP will be subject to fluctuation.

NB: artnet does not publish hammer prices except, occasionally, for lots that do not have reported BP, in which cases they only publish hammer prices.